At AO.com, we talk a lot about trying to do things that would make our mums proud. 

That means doing the right thing when it comes to decisions about how we run the business, how we look after our customers and how we treat our people.

I’ve thought for a long time that the right thing to do is to find a way for every single AO employee to receive a meaningful reward, above and beyond the wages they earn, for the value they create.

We’ve been working on ideas for months and the Value Creation Plan we announced this week is a unique rewards scheme that I really am proud to tell my mum about. 

Proud because it absolutely epitomises the AO way of doing things. Proud because it is absolutely true to our ‘One AO’ principle. And proud because it gives all of our people a stake in the future success we can achieve together.

Ambition and innovation

We have an unbelievably dedicated and talented team striving to go the extra mile for our customers every day. The point of our plan is to recognise and reward exceptional performance and the value it creates. 

It’s not like other incentive schemes that focus on individuals – particularly top executives. The AO way is to prioritise the value in what we achieve together – all 3,000 of us. 

Rewards will kick in as our share price rises and market cap grows in response to exceptional performance. The pot starts building when the share price hits £5.23, valuing the business at £2.5bn – compared to around £790m today – and grows through phases up to a maximum of £300m over five years.

“The whole business is now obsessed with delighting our customers, driving innovation and creating growth”

The key point is that the majority of that value is shared with every AO employee, not just executive management.

What this means over time is that everyone could receive around a year’s salary – making a real difference to them and their families. That’s what we mean by exceptional rewards for exceptional performance.

Our remuneration committee has been canvassing investors and there is broad support for the plan. They like the innovation and they like the ambition. By ambition, I mean we’ve set a pretty high bar for this. We’ve done that with confidence based on changes we’ve made to the business and progress we’re making.

We went back to basics, bringing clarity and leadership to the fundamentals of AO. Our model and vertically integrated ecosystem is a structural advantage when properly leveraged. The whole business is now obsessed with delighting our customers, driving innovation and creating growth.

Vote of confidence

It is clear that Covid-19 has driven a real and, I believe, durable shift in shopping behaviour. We saw five years of change in just five weeks. Now we’re investing to cement that change and create lifelong habits. It’s by fixing the business that we have ensured AO is set up to benefit from this accelerated structural shift to online in the UK and Germany and our model is now truly scalable.

AO is fit and focused on growth and this scheme is a vote of confidence in our people and the future we’re building together.

One final point, in case anyone wonders about my own stake – it’s very simple. 

Every penny of my share will go to OnSide Youth Zones – a charity I care about as passionately as I believe in AO – because talent is evenly distributed but opportunity is not. And the charity sector needs disrupting just like the electricals market did 20 years ago.

Be Inspired

Retail Week runs the Be Inspired programme, promoting diversity at all levels of retail and encouraging everyone to fulfil their career aspirations, regardless of gender, ethnicity, sexuality or socioeconomic status.

We give people the practical skills needed for career progression and help retailers build a pipeline of diverse and talented future retail leaders

Find out more and learn about how you and your business can get involved here.