The colleague share plan ! Facts

[Martin Walsh]

A lot has been written about colleague share but few seem to have any real facts about the scheme. Well with your share certificate you recieved a booklet called The colleague share plan ( your guide to Royal Mail Group colleague shares and stakeholder dividends. )

So let's remind of ourselves what that document actually said what colleague shares were based on.

1.Royal Mail faces a challenging future.
2.The first allocation of colleague share has been made , people who work full time will get 408 colleague shares each. Part timers will get a pro rata allocation. There will be two further allocations in 2008 and 2009.
3. The value of colleague shares will be determined twice per year. The better we do as a company the more they will be worth, but remember they can go down in value as well as up.
4. Four years from now you will be able to sell some of your colleague shares back to the company and after 5 years the company will buy back all your remaining shares so with luck and hard work there a nice nest egg to look forward too.
5. In the meantime for the next three years a stakeholders dividend you will be able to earn an annual bonus each year based on company profits.
6. Colleague shares is the name for the phantom share plan. This isn't the same as having a legal share in the company but it is the next best thing.
7. Each colleague share is worth £1 at the time of the first allocation.
8. How are colleague shares valued ? putting a value on something as complicated as Royal Mail Group is not easy. We talked to the experts about how to do it and we agreed a formula with the Governemnt. The Value will come straight out of the numbers there is no judgement or guess work. The Government will check the calculations each time and we can call on an independent expert if we need one. Usually when someone buys a company they at how much profit they think they will earn in the future, how much cash and assets it has, and what debts there are. These are the main things colleague shares will be based on.
9. What about the Pension fund deficit ? The pension fund deficit is a real cost to the company , so it comes into the picture as well.
10. To be eligible for colleague share you have to be permanent and have been employed on the 17th May 2007.
11. people on causal contracts are not eligible , nor are ROMEC , Quadrant or GLS employees.
12. Can I sell my colleague shares before the fourth year ? No you have to hold onto the until then.
13. What happens at the end of 5 years ? The plan comes to an end and the company will buy your remaining colleague shares back from you at the valuation price at the time.
14. The first shareholder payment to launch the plan has been set at £800. More details will follow. The payment targeted for the first year will be larger than those for years 2 & 3.

They are the guidelines , colleague share was agreed by the Governemnt and Royal Mail. The CWU were no consulted and have opposed it even to the extent that £1000 of colleague shares was used for lump sum payments based on revisons. In fact the CWU used solicitors to see whether all of it could be converted.

it was exactly as it was sated a phoney scheme which Leighton and Crozier set up and in my opinion they knew they would never be around at the end of the plan and they knew it would never come in to what the plan was.

[fishtank]

8. How are colleague shares valued ? putting a value on something as complicated as Royal Mail Group is not easy. We talked to the experts about how to do it and we agreed a formula with the Governemnt. The Value will come straight out of the numbers there is no judgement or guess work. The Government will check the calculations each time and we can call on an independent expert if we need one. Usually when someone buys a company they at how much profit they think they will earn in the future, how much cash and assets it has, and what debts there are. These are the main things colleague shares will be based on.
9. What about the Pension fund deficit ? The pension fund deficit is a real cost to the company , so it comes into the picture as well.

So rather than trying to deflect the blame away from Moya and onto Leighton and Crozier maybe you could explain in nice easy layman's terms how the shares could be worth as much as £2 a share in 2010 and yet now be worth £0 despite the fact that the company's position on all of the points above is now far stronger than it was in 2010 and how exactly that is not our present CEO's responsibility...with her £300k+ bonus.
Leighton and Crozier were responsible for a lot of things,most of it bad but they can hardly be held responsible for a position change that happened after they left.

Why is the union protecting Moya Greene?
What has she promised in return?

Moya Greene is 10 times smarter than little Adam and that makes her 10 times more dangerous,acting like a bunch of love struck schoolboys is not doing much for the credibility of the union...which is already at a record low point as far as i can see.

[Straight4ward]

I can honestly say, hand on heart, that when the Colleague Share scheme was announced, I said that when it came to the final valuation the shares would be valued at zero. So a £100 return has exceeded my expectations.

Also, those that like to blame the Union for every setback would do well to remember that the Union opposed this scheme from the outset.

Just seen your post FT, not entirely convinced about the "stronger position". Mentioned in the report & accounts is the fact that the current profit of £211 million does not include a contribution to the pension deficit. The previous year this contribution was £292 million and we still managed to achieve a profit of £39million. It seems to me we're going backwards.

[fishtank]

Just seen your post FT, not entirely convinced about the "stronger position". Mentioned in the report & accounts is the fact that the current profit of £211 million does not include a contribution to the pension deficit. The previous year this contribution was £292 million and we still managed to achieve a profit of £39million. It seems to me we're going backwards.

I think that was my point though.
Not having to pay into the pension deficit has placed us in a stronger position,we will never have to pay into the pension deficit again.
The colleagueshare scheme directly mentions the pension deficit as a real cost that will effect the final value of the shares...surely it's complete removal as a real cost would effect the value in a positive way?
Surely since the scheme mentions debt as a factor the removal of the majority of the commercial loans would also have the same effect?
Surely since the plan mentions cash and assets the return to the company of over £1.2Billion in assets in april would also have the same effect?
Surely since the plan mentions future profits the change in the regulatory framework,increase in prices and the fact that during the worst recession i can remember and despite huge modernisation costs including £77million in redundancies alone...we are still making a reasonable profit...would also have the same effect?
If we really going backwards why was our CEO awarded over £300k in bonuses?

It would seem that despite over 12 months of "talks" on this issue no-one can yet answer the most basic of questions that lie behind this scam.
What exactly is it about the company's valuation that has changed which has led to the valuation of the shares dropping from £2 to £0 in the space of 2 years?
If someone dares to answer that in simple terms i can understand then fine.

As for the union opposing colleagueshares,i must have missed those debates,campaigns and policies.
I remember them saying they opposed colleagueshares but then i remember them saying they opposed the pension reforms as well.
To oppose something you have to put up some kind of genuine opposition,not just say you oppose something in the hope that,if it goes pear-shaped you can turn around smugly and say i told you so..

[fishtank]

I think,..and this is really the bitterest pill to swallow because despite what you think about the union's involvement with the shares in the past they are up to their necks in it now.

Both the money for and the value of the colleagueshares is still there and always was.
Royal Mail desperately needs to increase the pace of the revisions and the savings realised from them.
The colleagueshare money will now be used with the union's blessing to fund the new incentive scheme.

[pants123]

what really annoys me is how can they pay out £100 pound for this new performance incentive scheme, when this scheme is still being discussed, and no one knows what this scheme is all about yet.. all this i read in a letter from the union a few days ago, what a complete joke, Royal Mail has taken its people for a ride, always moving the so called rewards forward, they call it dangling a carrot.. a joke. end of.

[seeker019]

It's only £100 but it will be another crap scheme RM won't complete.
As for CS I bet managers got the full payment plus interest.

SHAFTED SHAFTED SHAFTED

[dvbuk55]

What is interesting is the fact that dingo posts a colleague share plan fact sheet totally out of the blue. I would imagine that this is a prelude to a shafting up the backside with the new "Union backed" incentive scheme! Which does what exactly? Ensure that this time there WILL be reward for effort or yet another catalogue of excuses when suddenly the pot is empty yet again. This does seem yet another case of money available for the executives and managers but when it comes down to the workforce the cupboard is bare. And the CWU.................well it's only to be expected. Nobody has yet answered the fact that in November people were being paid £1400 and three months later..........zilch.

[suz67]

don't forget we were told there would be winners and losers!!!

[dvbuk55]

It makes you wonder if the leavers were given the 1400 quid not because the shares were worth it but to keep the lid on the fact that they were worthless for a few more weeks......................and did the union know that already?

[hubbahubba]

I'd bet my 100 quid on the new scheme being some sort of performance related pay deal,fully backed by the union.Any takers?

[flaminmoses]

at my last job there was talk of a similar share scheme.

its all just an excercise to boost initial morale for the changes.
those changes involve vr and natural wasteage so what happens after the change plays right into rms hands

[tommythreesheds]

Any news on our....excuse me, cough....."new incentive" scheme?
Seems to have gone a bit quiet since the £100 carrot.

[dvbuk55]

Any news on our....excuse me, cough....."new incentive" scheme?
Seems to have gone a bit quiet since the £100 carrot.

Well seeing as how we've had the carrot the incentive scheme must have been agreed in principle - just the i's and t's to be dotted just likee the BT2010.

[postietaz]

all these hours going out of these revisions ,but still doing the work ,our shares must be going throuh the roof