Government Presses Mail Board To Waive Shares

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Non-executive directors of Royal Mail are asked to waive an entitlement to free shares during its privatisation, Sky News learns.

The directors of Royal Mail have declined the offer of free shares to employees after coming under pressure from Government officials, Sky News understands.

Non-executive board members of the company, which will be formally privatised in the next week, were asked by the Department for Business, Innovation and Skills (Bis) not to participate in the employee scheme, according to sources close to Royal Mail.

The free shares windfall, which is expected to be worth more than £2,000 each to approximately 150,000 Royal Mail staff, will be accepted by Moya Greene, its chief executive,

The prospectus accompanying the privatisation, published late last month, disclosed that the eight non-executives, led by the chairman Donald Brydon, had declined the offer, saying:

"The Non-Executive Directors, while eligible to receive Employee Free Shares as part of the Employee Free Shares Offer, have each decided it would be inappropriate, as independent non-executive directors, to receive Employee Free Shares and so have opted-out of receiving Employee Free Shares," it said.

One Whitehall source said the participation of the non-executives in the scheme could have prompted accusations that their independence was being compromised. They added that the directors' part-time status meant that it would also have been difficult to determine a fair allocation of shares.

A person close to the company said that the request from BIS officials had been "accepted without fuss" and denied that there had been any suggestion from the Government that Ms Greene or her executive colleagues should also waive their entitlement to free shares.

The news comes amid buoyant demand for shares in the biggest UK privatisation for decades, with allocations of stock set to take place later this week.

Full trading in Royal Mail shares will begin next week amid accusations from Labour spokesmen that the postal operator is being sold off "on the cheap".

Some members of the public reported today that they were experiencing difficulties registering orders on the website set up to allow retail investors to buy shares in Royal Mail.