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850 workers to get free shares under Royal Mail privatisation plan
8:10am Monday 16th September 2013 in News
HUNDREDS of Royal Mail staff in Southampton are set to receive free shares as the company prepares for privatisation.
An estimated 850 employees in the city will be eligible for the free shares.
The deal is yet to be finalised but some estimates suggest workers who opt in could be in line for a £2,000 windfall.
It comes as the Government announced its intention to float the Royal Mail on the London Stock Exchange in the coming weeks.
In total, approximately 150,000 Royal Mail staff could be eligible around the country, accounting for ten per cent of the total shares available.
It makes it the largest free allocation of shares of any major UK privatisation and all full-time staff will receive the same number of free shares, regardless of their grade.
It comes just weeks after the company unveiled proposals to move more processing work from its plant in Portsmouth to its centre in Southampton after a decrease in the amount of post it handles.
Despite the share windfall, one employee from Hedge End, who works at the city’s sorting office in Herald Road, was not convinced about the scheme.
The worker, who did not want to be named, said: “The shares seem like a good idea but this is just a carrot to prevent people from going on strike.
“The Government is doing the same as it did with British Rail and all the others, just selling it off for profit.
“Privatisation is going to hit our pensions.”
After three years, employees can sell their free shares or transfer them, but will pay income tax and National Insurance on the shares.
After five years, no income tax or National Insurance needs to be paid on the free shares if sold.
In a separate and additional offer, the Employee Priority Offer (EPO) gives eligible employees a chance to apply to buy shares in Royal Mail.
Eligible employees will pay the same price as other investors but receive priority on up to the first £10,000 worth of shares applied for, up to an overall limit of ten per cent allocated in the retail offer.
Moya Greene, chief executive officer of the Royal Mail Group, said: “By owning ten per cent of the company, 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.”
As previously reported, Royal Mail blames a fall in work at the Portsmouth centre on an increase in competition from email and other postal firms.
Mail sent to the Portsmouth area has decreased by 43 per cent, while post sent from the area to other places nationwide fell by 15 per cent since 2009.
Talks are continuing with the unions and staff, but work on transfering the operation over could begin in autumn 2014.
The company hopes to close the centre without any compulsory redundancies to its 380 employees there.
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