Royal Mail chiefs apply for 500k of extra shares

[TrueBlueTerrier]

Royal Mail chiefs apply for 500k of extra shares: Small investors could lose out to executives

http://www.dailymail.co.uk/news/article ... ds-newsxml" onclick="window.open(this.href);return false;

Employees could make as much as £700 as stocks are expected to rise sharply when trading begins on Friday

But campaigners say it is wrong if Royal Mail’s executives made ‘fat profits’ if the demand for shares by small shareholders is scaled back

Royal Mail executives have applied for around £500,000 of additional shares in the controversial flotation of the state-owned giant, it emerged last night.

The applications – which include one from chief executive Moya Greene – will receive ‘priority’ over other small investors clamouring to buy shares in the controversial privatisation.

Last night campaigners said it would be wrong if Royal Mail’s executives and the City were to make ‘fat profits’ if the demand for shares by small shareholders is scaled back.

Leading the charge: Chief executive Moya Greene will get a chunk of free shares like all other Royal Mail workers despite having a pay package of £1.5million

Like all Royal Mail workers, Miss Greene will get a chunk of free shares, estimated to be worth around £2,000 for each worker.

They could make an instant profit of more than £700 as the shares are set to rise sharply when conditional trading begins on the stock market on Friday, possibly jumping from £3 to £4.

But Miss Greene and her ten fellow directors also want to buy shares in the flotation, according to the company’s prospectus.

Buried on page 214, it states: ‘The directors have indicated to the company that they intend to make applications in the offer for an amount equal to, at least, approximately £500,000, in aggregate.’

The executives will benefit from the same ‘priority’ given to Royal Mail’s workers when applying for shares and can apply for as many shares as they wish within the tranche that has been set aside for staff.

If that part of the offer is oversubscribed then they will be subjected to a £10,000 limit.

But the executives will be hoping that many of their lower paid staff will simply not have the financial resources to apply for more shares. The average postman working full-time earns a pay package of nearly £25,000, while Miss Greene enjoys a pay package of around £1.5million a year.

Dr Tim May, of the Wealth Management Association, which campaigns for the rights of small shareholders, warned he would be ‘very disappointed’ if they were over-looked.

He said: ‘Given this is the first positive sign of smaller investors getting a share in our economic growth, we would be very disappointed if their allocation were reduced significantly, or at all.’

Business minister Michael Fallon has insisted small investors who want to buy shares in the privatisation will ‘get their fair share’.

The Government decided to set up an ‘employee priority offer’, open to all workers, to encourage loyalty among its staff and to give them ‘a share in the group’s success.’

Under the deal, they will pay the same price as other retail investors – between £2.60 and £3.30 per share – but will ‘receive priority on up to the first £10,000-worth of shares applied for’.

Instant profits: Royal Mail employers could stand to make more than £700 as sales are expected to rise sharply when trading begins on the stock market on Friday

The ‘employee priority offer’ will be capped at 10 per cent of the total number of shares allocated in the retail offer, which is 30 per cent of the total number.

Justin Modray, of the personal finance website Candid Money, said: ‘While the Royal Mail flotation could stand to make the City and Royal Mail executives a fat profit, it is important that small investors do not get over-looked and end up having their share allocation scaled back.

‘The danger is that Joe Bloggs gets scaled back, but the City and the executives do not suffer in the same way.’

Royal Mail’s eight non-executive directors, including the chairman Donald Brydon, have opted out of receiving free shares, deciding it was ‘inappropriate’ to accept them.

But both the non-executive directors and the executive directors have subscribed for a total of £500,000 of shares in the company.

The exact number of shares which they end up getting is expected to be published on Friday when the share price is announced.

The Royal Mail prospectus states: ‘The directors will not receive any priority application beyond that applicable to all eligible employees.’

To be eligible, a worker must have been employed by the company on July 10 and still be working for the firm at the time of the flotation.
After five years, they can be sold tax-free.

[POSTMAN]

Spot the difference...

Minging cat that got the cream.PNG

[cloherty1976]

It's good that they have these as you can see when they sell and when they buy more shares. This can help you in your investments and help the smaller invester make money.

[aposter]

I want to know when my salary is going upto £25k I make a postie gross pay out to £20.5k That is some hell of a rounding up

[cloherty1976]

I want to know when my salary is going upto £25k I make a postie gross pay out to £20.5k That is some hell of a rounding up

It's an average I earn 40K plus and people earn more and some earn less..

[k979aaa]

Spot the difference...

Minging cat that got the cream.PNG

The FAT CAT at the top has got the cream today and tomorrow

[UnhappyGremlin]

If anybody can claim to be genuinely shocked by this, I'd be amazed.
It's the big earners, lining their own pockets again.
And at who's cost? Posties, tax payers, and the public in general.

[Budfrog]

This does put a massive question mark over how objective the decision making process by Royal Mail's executives was to promote privatisation when there was so much self interest at stake. More importantly for the employees, can you really trust these people to manage the business going into the future when money could so easily cloud their judgement.

[Shambles]

100% right

They must think we have wind between our ears! Self Serving, bunch of Crooks, would better describe this Mötley lot!

[POSTMAN]

Looks like they're going to miss out...

http://m.bbc.co.uk/news/business-24471622" onclick="window.open(this.href);return false;

Small investors will be favoured in the privatisation of the Royal Mail, but those seeking a large stake might not get any shares, the BBC has learned.

Anyone who subscribed for the minimum entitlement of £750 will receive 100% of their application, according to BBC business editor Robert Peston.

But the government will set an upper level where investors will not receive any shares at all, he said.

That level could be set at £10,000 worth of shares.

[Budfrog]

Looks like they're going to miss out...

http://m.bbc.co.uk/news/business-24471622" onclick="window.open(this.href);return false;

Small investors will be favoured in the privatisation of the Royal Mail, but those seeking a large stake might not get any shares, the BBC has learned.

Anyone who subscribed for the minimum entitlement of £750 will receive 100% of their application, according to BBC business editor Robert Peston.

But the government will set an upper level where investors will not receive any shares at all, he said.

That level could be set at £10,000 worth of shares.

Doubt they will miss out at all.

[Shambles]

All they have to do is give family members the cash to buy it for them....we ain't stoooopid! FFS

50 x10,000 = 50 people divided into 10 = 9 family or friends plus themselves.... = 500,000

Not rocket science is it?

[DavidUK]

Employess only have priority up to £10,000. I assume this also applies to directors but may be wrong. Family members wouldn't be able to access the EPO.

[Shambles]

Employess only have priority up to £10,000. I assume this also applies to directors but may be wrong. Family members wouldn't be able to access the EPO.

Let's hope your assumptions correct, although I tend to never assume anything for fear of making an Ass out of u and me

[Verging]

All they have to do is give family members the cash to buy it for them....we ain't stoooopid! FFS

50 x10,000 = 50 people divided into 10 = 9 family or friends plus themselves.... = 500,000

Not rocket science is it?

No simple mathematics.

10 directors + only 4 family members each gives you the 50 people needed to apply for 10,000 shares each if they were purchasing 500,000 shares. They were looking to purchase around £500,000 worth of shares not 500,000 shares. The 50 people applying for 10,000 shares would get something like £1.65m worth of shares if the share price is £3.30 and they received all their requested allocation.

If the 10 directors apply and receive only 10,000 shares each that would be around £330,000 if the share price is £3.30.