A Oxygea, a Corporate Venture Capital (CVC) vehicle with US$150 million to invest in startups focused on sustainability and digital transformation, which has a unique operation in Corporate Venture Capital and Venture Building, also presents an unprecedented model in the corporate context, created by the fund to foster its culture:Long-Term Incentive Program based on Tokens.
The initiative creates an investment portfolio accessible to employees to share in value creation, which results from the investments the fund makes in startups, similar to some of the more common practices among Venture Capital players. In addition to the monthly salary and benefits, the Oxygea corporate team also has access to a variable compensation, converted into aPLR(Profit Sharing) based on business and individual results and onTokensallocated proportionally to the size of the contributions made by Oxygea.
"This model was created to attract entrepreneurial-minded individuals to our team, share with participants the success and value creation of Oxygea with the invested startups, aligning interests and risks through a win/win; lose/lose mechanism. In this way, we stimulate investment appetite, agility in decision-making, and diligence with the available capital to invest," explains Head of People, Rafaela Marques.
To illustrate in practice, suppose an employee who receives an annual variable compensation of R$10,000 can choose to invest a certain percentage of this amount in the ILP (Long-Term Investment) model via Tokens. If the option is 20%, R$2,000 are allocated to the ILP model – which may or may not multiply, depending on the success of the investments – and the remaining R$8,000 are received through PLR or ICP (Short-Term Investment). At Oxygea, the commitment affects a significant percentage of the leadership's variable compensation. For the team, participation is voluntary and can reach up to 20% of the variable compensation in the Tokens program. There are no restrictions on positions to participate in the program, but there is a validation ritual for the names to be nominated for participation by the board with pre-defined criteria.
Just like the fund's investment mechanisms, Oxygea's Tokens program emerged after a series of Benchmarkings carried out during the vehicle's conception, which mapped critical success factors and also patterns among those that were not successful in the CVC market, which, according to Artur Faria, CEO of Oxygea, was fundamental to realize that, even operating a Corporate Venture Capital, a certain level of independence was necessary to make the investment operation more competitive:
“We observed models that ended up losing flexibility and competitiveness due to the direct connection with the parent company, facing dilemmas in aligning incentives for risk-taking. Our Token model is now a major differentiator in the CVC market, where most still use the same remuneration format as their ‘mother ship’”, highlights the CEO of Oxygea.
The token proposal is also an alternative to other forms of compensation that were discarded during the benchmark study, such as the formation of partnerships, stock options, shares, and others. The model used, which is an original creation, was co-constructed by many hands by Oxygea together with its parent company, Braskem, and with the partner startup Distu, an expert in the field, involving the Human Resources, Legal, Financial, and Portfolio areas, also including input and contributions from the fund's Advisory Board. This project was a finalist for the Think Work Innovations Award 2024, competing in the 'Compensation and Benefits' category and awarded in the 'Innovation Partner' category.
