News

Ubisoft Offers Discounted Stock To Employees

by Mike Futter on Jul 01, 2016 at 06:54 AM

Ubisoft is currently in a battle for its independence. French company Vivendi has been slowly purchasing more of the publisher’s stock, increasing its control in hopes of securing a board of directors seat this fall.

In order to protect itself from hostile takeover, Ubisoft has a few different options at its disposal. We’ve covered many of them in our extensive explainer on the ongoing situation.

Recently, the Assassin’s Creed publisher has invited employees to invest more in the company with an incentivized stock offer. Employees can purchase shares from the company treasury at a 15 percent discount. 

The company will match their purchases one-to-one up to €1,000. Employees can invest up to 25 percent of their gross annual salary. The shares on offer are capped at three percent of the company’s capital as of April 19.

Of note, the shares and their respective voting rights will be held and exercised by the supervisory board of the mutual fund through which they are purchased. This will last for a period of five years, called a "lock-up period," during which time the shares may not be traded or sold. In other words, as more employees buy in for financial purposes, corporate leadership will increase its hold on their votes.

At the end of the five years, the employees can cash out or transfer funds to another Ubisoft mutual fund. All shares in the mutual fund will be sold at that time.

"Our intention with these programs is to give employees an opportunity to be more closely linked to our development and future performance," an Ubisoft representative told us. "With employees representing a bigger share of our capital they will have a bigger say in decisions taken by the company and will be even more invested in the company’s long term success."

While the initial offer was for non-U.S. qualifying employees, Ubisoft today announced a similar program for those in the States. There are some differences, particularly in the amount that staff can invest. Here in the U.S., the limit is decidedly lower at 2.5 percent of annual gross salary. Both plans draw from the same pool amounting to three percent of Ubisoft shares.

 

Our Take
This tactic not only allows Ubisoft’s executive body to grow its control, but it galvanizes staff. Given the publisher’s success, it’s unlikely that many employees would want to see the company taken over by Vivendi. The discounted shares and five-year return on principal and company match (as well as interest) make this a good deal for everyone involved.