Approximately 150,000 Royal Mail Group employees will be eligible for free shares in the organisation through a share incentive plan (Sip).
Each of the organisation’s full-time eligible employees will be given the same number of shares, with part-time employees given shares on a pro-rata basis based on their paid hours in a given time frame.
Through the scheme, employees can sell their shares or transfer them out of the Sip, but will pay income tax and national insurance (NI) on the shares. After five years, no income tax or NI will need to be paid on the shares if sold.
Royal Mail Group employees will receive an information guide in the post from 13 September, which sets out the details of the share offers.
The announcement follows the news that the government intends to float Royal Mail Group on the London Stock Exchange in the coming weeks. The shares offer makes 10% of shares in Royal Mail Group available to eligible employees at the time of flotation.
Royal Mail intends, in the absence of unforeseen circumstances, to propose a final dividend of £133 million to be paid in July 2014.
A separate and additional offer, the Employee Priority Offer (EPO) gives eligible employees a chance to apply to buy shares in Royal Mail Group. Eligible employees will pay the same price as other retail investors, but receive priority on up to the first £10,000 worth of shares applied for, up to an overall limit of 10% allocated in the retail offer.
Moya Greene, chief executive officer of the Royal Mail Group, said: “Our people are the heart of our business at Royal Mail.
“By owning 10% of the organisation, together we will have a meaningful stake in the business. I think this will engage everyone and encourage us to continue to work together to build a great future for Royal Mail.”