Share schemes and changing pay structures in commodities
Following record profitability in the commodities trading world, we have seen private trading companies such as Vitol and Trafigura announce bumper payouts to their staff via shareholder payouts. Vitol announced USD 2.5bn to be paid out to 450 top executives and traders for the first half of 2023, with Trafigura announcing similar figures for their…
Following record profitability in the commodities trading world, we have seen private trading companies such as Vitol and Trafigura announce bumper payouts to their staff via shareholder payouts. Vitol announced USD 2.5bn to be paid out to 450 top executives and traders for the first half of 2023, with Trafigura announcing similar figures for their partners following a large uptick in the company share price. Other top-tier trading companies such as Gunvor, Hartree, and Mercuria also offer similar share programs which are opaque to the outside world but are incredibly lucrative to those staff within the company
A private share scheme is a compensation strategy that allows employees to acquire shares or stock options in their company. While common in various industries, the commodity trading sector has adopted this practice as a means to incentivize employees, align their interests with the company’s success, and retain valuable talent.
The offering of shares and their dividends are often in addition to cash bonuses and in years of outperformance and large bonuses being given to staff, it is a way to keep talent in the business given the lock-in periods which are typically 3-5 years.
Each company share scheme seems to vary from company to company and is used to attract talent, either by offering at the beginning or by showing a clear path to attainment.
Given these programs are becoming more widely publicised, in addition to more aggressive and “exotic” payment structures being offered by funds and new setups such as the influx of Chinese trading houses and miners, it is increasingly important for companies to understand how their competition pay, in order to remain competitive.
Aurex Group can offer comprehensive competitor and compensation analysis reports tailored to your needs to help your company remain competitive in the market, if this is something that would be interesting, please reach out to one of our consultants.
Sami Jacobs
Sami JacobsConsultant
+65 3165 0710
EA 18S9493 | R2092031