Royal Mail appoints firm to set up share scheme

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Your employee share scheme: Equiniti conditionally appointed

We have conditionally appointed Equiniti to act as our registrar and administrator on the establishment of an employee share scheme.

Delivering your share
Parliament decided, as part of the 2011 Postal Services Act (‘the Act’), that ten per cent of shares in the business will be set aside for employees.

The Act provides that, when the Government’s shareholding in Royal Mail falls to zero, ten per cent of the company is owned by or on behalf of the employee share scheme.

This does not mean that all ten per cent needs to be made available in one go. Some or all of these shares (or the equivalent value) could be released before the Government sells its entire stake in the business.

There are a lot of details still to be worked out about employee share ownership and discussions with the Government are continuing. There are a number of possible ways in which the Government’s commitment about employee share ownership could be met.

The ten per cent minimum of Royal Mail shares planned for employees is one of the highest proportions of equity in any sale of a Government-owned business. Only Rolls Royce – sold in 1987 – matches ten per cent.

SelectionEquiniti has been selected following a robust procurement process. This involved both Royal Mail and representatives from the Department for Business, Innovation & Skills.

Equiniti will act as administrator of the employee share scheme for our employees. Any decisions about the nature and timing of a transaction are a matter for the Government. All options remain open.

No final decisions have been made but the Government has confirmed it is determined to undertake a sale of shares in Royal Mail this financial year (2013/14). The structure of the employee share scheme will also be decided by the Government.

Keeping you informed
We are committed to communicating with you as a matter of priority. We will keep you up-to-date as and when we are informed of decisions which have been made.

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Royal Mail said it has conditionally appointed Equiniti to set up £300m employee share scheme, as postal service moves step closer towards privatisation


Royal Mail came a step closer to privatisation on Thursday when it appointed a firm to set up a £300m employee share scheme. As part of the sell-off 10% of shares in Royal Mail will be set aside for employees, although business minister Michael Fallon has not yet made clear whether staff will be handed the shares for free. Royal Mail said it had conditionally appointed Equiniti, an administration and payments firm, to act as registrar and run the scheme.

The government has said it is determined to press ahead with privatisation this financial year despite opposition from unions and rightwing thinktank the Bow Group, which this week labelled the sell-off politically "poisonous" in a letter to every Tory MP.

The Royal Mail's army of more than 130,000 postal workers has committed itself to fight a privatisation that the union claims will "hurt staff, customers and thousands of small businesses", but Fallon has warned that if the union continues to fight a stock exchange flotation the coalition will sell the company to sovereign wealth funds or other foreign buyers.

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SelectionEquiniti has been selected following a robust procurement process.

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High cost to trace shares exposed
By Paul Lewis
Presenter, Money Box

ProSearch actively seeks out shareholders who companies have lost track of
A company which tracks people down to reunite them with their shares charges five times as much as if they do it themselves, the BBC has found.

ProSearch charges up to 17.4% of the value of the shares and any unpaid dividends.

But people going direct to its parent company, the share registrar Equiniti, can pay a fraction of that cost.

The firm said it made clear to customers that it offered a voluntary service.

Caya Edwards told BBC Radio 4's Money Box programme that she was charged £406.94 to get back dividends of £306.39 and reunite her with 255 BG Group shares.

ProSearch kept the dividends to pay the fee and sold eight of her shares to pay the balance.

She accepted the offer after she was told by the registrar that held her shares there was no alternative.

"I rang up and asked if, now I was aware of those dividends, I could be given the money without going through ProSearch.

"They said 'no, it is in the hands of ProSearch. You can only get hold of them by going through ProSearch.'"

Optional service

The share registrar for BG Group shares is Equiniti, which also owns ProSearch.

It would not comment on what Mrs Edwards had been told. But it said that the letter it sends out makes it clear that the service is "voluntary".

But, in a written statement, BG Group said: "The advice that Mrs Edwards should have been given by the ProSearch phone line was that the programme is entirely voluntary.

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There is an amount of money involved in tracking them down. It can be a huge amount of work - we make it clear that it is a voluntary service”

ProSearch
"She should also have been advised that she could reclaim her dividends by contacting the share register directly and given instructions about how to pursue these options."

The BBC has learned that if Mrs Edwards had gone direct to Equiniti the total cost to replace her share certificate and get her dividends would have been just £74.11.

If all she had needed was to register a simple change of address that would have cost nothing.

Mrs Edwards had a fairly small shareholding worth about £3,000. Someone with £20,000 of shares would normally pay ProSearch £3,480 in fees. If they went directly to its parent company, Equiniti, the charge would be just £40, plus an indemnity fee of £83.95 - a total of £123.95.

Other share registrars make similar charges.

Doing it yourself

After complaining to ProSearch and Equiniti, Mrs Edwards had her fee refunded in full, which ProSearch said was "a gesture of goodwill".

A ProSearch spokesman added: "There is an amount of money involved in tracking them down. It can be a huge amount of work - we make it clear that it is a voluntary service, and offer a free helpline."

People who are approached by a share search firm can find the name of the registrar by calling the company which issues the shares.

Registrars will normally reinstate share certificates for a modest fee and note a change of address at no cost.

BBC Radio 4's Money Box is broadcast on Saturdays at 1200 GMT and repeated on Sundays at 2100 BST.

Google The Equiniti Scam...
Obviously Royal Mail didn't bother to.