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Willis rolls out 130% bonus pot to reward staff

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Willis Towers Watson has made an early positive move in efforts to lift staff morale and boost retention by telling employees its first-half bonus pool will be funded at more than the 130% level, this publication can reveal.

Sources said Willis had previously intended to pay 2020 bonuses pro rata up to the closing of the Aon deal a month after closing.

Following the collapse of the transaction, however, it has given early confirmation to staff that the bonus pool through the first six months of the year will be generous.

It is understood these bonuses will be paid out next spring, along with a component for the second half of the year, which CEO John Haley suggested would also likely be funded at 100% or above depending on H2 results.

Sources said this size of bonus pool is unheard of and will provide the firm with the opportunity to reward loyal staff.

Willis has had a challenging period following the termination of its mega-merger with Aon, with the share price coming under sharp pressure, partially owing to the unwind of the merger-arb trade.

It has faced heavy scrutiny around its decision to pursue a transaction with a high degree of regulatory risk and a long wait for close when it had a retirement-age CEO, without an obvious internal successor.

Pressure has also been heightened by uncertainty surrounding the future of Willis Re and other assets which Willis had agreed to divest to satisfy regulatory concerns, with signs growing that the firm will take the pragmatic choice by selling its reinsurance broking arm to AJ Gallagher.

As the company reported a stronger than expected set of second-quarter results that helped the share price move 4% higher, Willis also confirmed that Haley would retire at the end of the year.

As previously revealed by this publication, Willis took a decision in contrast to Aon not to honour the retention bonuses it had put in place to see key staff through to closing.

With an early announcement that Willis had added $1bn to its share-buyback program after receiving the $1bn break-fee from Aon, Willis staff have likely been looking to management for signs it would take steps to strengthen its employee value proposition.

It is perhaps the hottest market ever for broking talent, and Willis staff have been under constant offer from rivals since the Aon deal was announced in March last year.

Some staff are likely to be relieved the transaction has not gone through and pleased to put the prospect of a deal behind them.

But others likely fear a challenging transitional period, and competitors – now including Aon – are expected to continue targeting its staff with lucrative offers.

Efforts from Willis' management team to build bridges with staff and underscore their value to the firm will be key to plans to first shore up the staff base, and then to replenish it through hiring.

Willis declined to comment.

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