Around 110 Royal Mail employees in the Hebrides will receive Free Shares in Royal Mail, following last week’s announcement by the Government of its intention to float Royal Mail on the London Stock Exchange in the coming weeks.
Overall, approximately 150,000 eligible Royal Mail employees – the overwhelming majority of Royal Mail Group Limited employees in the UK – will receive in the post an information guide which sets out the details of the Royal Mail Employee Share Offers.
The Free Shares Offer makes 10% of shares in Royal Mail available to eligible employees (who have not opted out), automatically and for free, at the time of flotation.
Each eligible full-time employee will receive the same number of Free Shares, regardless of their grade. There is a pro-rata allocation for part-time employees, based on their paid hours in a given time frame.
The Free Shares will be held in a tax-advantaged, HM Revenue and Customs-approved Share Incentive Plan (SIP). In accordance with SIP rules, this means employees must hold their Free Shares in the SIP for at least three years before they can be sold (unless certain exceptions apply). Royal Mail intends, in the absence of unforeseen circumstances, to propose a final dividend to be paid in July 2014, of £133 million. 10 per cent of this will be paid to employees who are allocated shares under the FSO, in line with their allocation.
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 retail investors but receive priority on up to the first £10,000 worth of shares applied for, up to an overall limit of 10 per cent allocated in the Retail Offer.