Gamification proves a winner for Sportradar post-IPO

Case study:

The transition from private to public can have major implications for how companies approach employee equity compensation. Sportradar, who operate in the sports technology industry, took this as an opportunity to reimagine their equity offering for C-suite executives and other key personnel.

Headquartered in Switzerland, Sportradar, founded in 2001, places a strong emphasis on innovation and going the extra mile. Positioned at the intersection of the sports, media and betting industries, the company is dedicated to creating immersive experiences for sports fans and bettors.

The challenge

At the start of 2024, Sportradar’s existing equity-based incentive agreement for senior executives was due to expire and because that plan had been introduced pre-IPO (Initial Public Offering), a new initiative was needed, one that would be suitable for a publicly traded company.

The objective was to introduce a new plan that would be attractive and easily understood, while also designed to encourage high performance and alignment to stockholder return.

One of the key details in the new plan was a variable pay element (more on which below), which Sportradar sought to ease any reservations by making clear to their target audience how what was being proposed could favor them. They identified early on that communications around this would need to be very clear, something they sought to tackle from the off.

The company was eager to encourage top executives to recognize the connection between their individual efforts and the success of the company. More specifically, they wanted to encourage participants to ask the question, “what can I do to increase our share price?” The logic being that when senior personnel adopt that mindset it can inspire them to go the extra mile.

The solution

In close collaboration with J.P. Morgan Workplace Solutions, Sportradar, and other outside partners developed an initiative that ultimately led to the introduction of a plan which targeted key personnel in seven countries.

This offering was heavily linked to performance and also, leaning into the sports side of their industry, incorporated gamification elements, which proved particularly effective at helping executives to understand a) what was being proposed and b) how it would play out over time.

In practical terms participants signed up to a variable pay arrangement. If the stock price rises sufficiently over time, individuals can hope to double their vesting value. In this way, the plan is designed to encourage participants to give their all in the interests of the company and also for themselves – a win-win proposition, that encourages positive results at both a team and individual level.

The communications and education effort, involved holding one-to-one sessions on how the ranking of individual performance would work. Video demonstrations were recorded and sent to executives, so they would be able to watch and rewatch again at times of their choosing.

J.P. Morgan Workplace Solutions played a vital role in getting the plan up and running, with all offers and acceptances processed through our online platform.

What about the plan?

The Executive Omnibus Plan offers performance stock units (PSUs) and restricted stock units (RSUs), but with the ratio tilted towards PSUs (70% vs 30%). This was done with the intent of encouraging high performance. With this blend, the rewards on offer can be considerable, but under the agreement stockholders know that it needs to be a win-win scenario, i.e., participants only profit when the company prospers, achieving personal goals alone is not sufficient. Sportradar truly do value team performance over individual results.

An additional element is staggered vesting over four years, with multiple tranches issuing annually and stacking upon each other in each individual year. This is another high-performance incentive that was inspired by team sports, in that individuals need to contribute and deliver continuously throughout the year – putting in a good performance early on and then sitting back isn’t enough.  

What did success look like?

One of the key measures of success for any equity compensation plan is participation. On that metric, the launch could not have gone better with 100% participation – all eligible executives signed up via the Workplace Solutions online platform.

The company also believes the plan has helped to boost individual engagement. The gamification element resonates with their interests, the work they do and the industry they are employed in, while a high ranking on the league table can become a point of pride. Meanwhile, the company benefits as internal competition drives performance and standards, whether individuals are battling for top spot or fighting to stay on the right side of the 60th percentile line.

This interest is also reflected in the use of the Workplace Solutions platform by participants, with Sportradar reporting that there are more logins when the company’s share price is trending upwards.

What next?

Whether you are a fully private, public or pre-IPO company, get in touch to learn more about how we can support you and your compensation strategy?

Client testimonial may not be representative of other client experiences.
 
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