Royal Mail staff have been informed that their employee share scheme will be virtually worthless when it matures next year.
The ColleagueShares scheme, which was launched in 2007 and will mature in 2012, was set up by former chairman Allan Leighton and former chief executive Adam Crozier as a phantom equity plan.
In a letter to staff, the Royal Mail said the scheme has paid out bonuses of £1,600 to full-time eligible staff with a further £1,000 available if targets are met, of which £600 is funded by the scheme.
However, due to the difficult outlook for the business, it is now likely staff will only receive the remainder of the cash bonus element. The shares themselves are unlikely to have any value when they start to mature later this year. The letter stated: “We will not know the exact value of the ColleagueShares until the end of the scheme in 2012.”
Chief executive Moya Greene has blamed the group’s financial position and lower-than-expected cost savings. Other reasons for the worthless share scheme is the volume of mail, which has fallen by 20% in the past five years, and a pension fund deficit that currently sits at £8.4 billion.
Royal Mail declined to comment.
Dave Ward, deputy general secretary at the Communication Workers Union (CWU), said: “Royal Mail has destroyed any remaining trust postal workers have for the company. Its argument that ColleagueShare has no value suits the company’s new business plan and also fits with the agenda of the Conservative-led government and plans to privatise Royal Mail.
“We acknowledge Royal Mail has problems with declining mail volumes and revenue but the company needs to honour its commitments to workers and be open and transparent about its financial problems.”
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i retired in2007 and was told my colleague share certificate (408 shares) would be worth at least £400.in 2012. i would warn any employee do not trust royal mail on any pay or bonus deal.
Funny how Royal Mail is now making a lot of profit leading up to sell shares in the service
I also retired in 2007 through medical grounds. An accident within Royal Mail. I heard nothing from Royal Mail in respect of the Colleague Share Scheme, neither good or bad. Yes, it is extremely odd that 2012 has now passed and, all of a sudden in 2013 Royal Mail is worth billions.
I cannot afford the £750 minimum to purchase shares which closes as of midnight tonight. All persons are set to make £300 plus once the company is floated on the stock market. Once again, it is the small person, with no spare capital, who loses out.
I found my colleague share certificate and thought great, this could help me out a little bit financially and then I read the details on the internet – colleague shares are worthless. It would have been nice if Royal Mail had at least had the courtesy to have contacted me, advising me that they were worthless and may be have advised me that they apologise but the same saying goes – the rich get richer, and the poor get poorer – I am disgusted.
i was given 408 Colleague Shares but i was Retired though ill health 2007 .Will i be entitled to a pay out ?
my colleague share number is 52241.