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BT UK Employees Open Arms for Huge GBP1.1bn Share Plan Pay Out

Friday, August 1st, 2014 (10:33 am) - Score 695

Some 23,000 of BT’s employees, specifically those that joined the operators five-year “saveshare” plan in 2009 under which they’ve saved between £5 and £225 every month until now, look set to receive a pay-out in shares that will be worth an average of over £49,000 each as the plan matures (assumes a saving of £124 per month was made).

The accrued monthly savings can now be used to buy BT shares for 61p each, which represents a 14p discount compared with the share price five years ago and a 327.5p discount compared to the share price of 388.5p when the financial markets closed last night. Most of those set to benefit from the £1.1bn windfall are contact centre agents and Openreach’s telecoms engineers, the lucky devils.

As usual with shares the actual gains that participants can make will depend upon how much they saved and what the share price is when they choose to sell. For example, some 7,000 participants chose to save the maximum of £225 a month and thus the shares they can buy are worth £89,705 (a gain of £75,620).

Gavin Patterson, CEO of BT, said:

I’m delighted that so many BT people are sharing in the company’s success through our saveshare plan. BT was facing tough times five years ago and this was reflected in the share price. We’re in a much stronger place today and I would like to thank our people for the major part they’ve played in the turnaround of the company over the past five years.”

Granted this isn’t really telecoms or broadband specific news, although it’s interesting to note that in 2009 BT’s share price was “at its lowest ever level – beneath 80 pence” and that was partly due to their then somewhat stagnant position in the market (rivals were harnessing LLU and ADSL2+ broadband to eat into BT’s once dominant hold).

Since then things have changed, not least thanks to the roll-out of soft-touch regulated FTTC and picking up all those Broadband Delivery UK contracts. BT TV and BTSport has also played a part in helping to retain and grow their customer base.

Aside from an expected but small change to FTTC pricing in the imminent future, BT looks set to benefit via gentle FTTC regulation for at least a few more years. But this rather assumes that Sky Broadband will be unable to secure a more flexible / unbundled style FTTC solution from the operator than VULA, which remains an on-going effort.

Leave a Comment
4 Responses
  1. Avatar DTMark says:

    Privatise the profits and socialise the losses and/or costs.

    What’s not to like..

  2. Avatar Steve Jones says:

    Any improvement in BT financial performance hasn’t been through growth. It’s been through savage cost cutting, massive reduction in head counts (in most areas) and off-shoring as much as possible. At some point, that will not be possible. It’s worth noting in 1984, the freshly privatised BT had over 250,000 staff. I think the latest figures (in the UK) is less then 70,000 (with about 19,000 employed outside the UK).

    I don’t know what DTMark is talking about “socialising the losses”. BT has not been bailed out like the banks. BDUK is a subsidy system for non-economic areas (not BT, an important distinction). it was introduced because of the way that Ofcom regulated the industry (using a market-lead approach and minimising the costs of the copper loop). There is simply no mechanism for cross-subsidy within the broadband market. Some of the areas would (eventually) have been included in commercial roll-outs, but BDUK sought to accelerate the process.

    There’s also a £7bn pension deficit, which looks like it’s going to take £500m a year to cover (and may get worse). Much of the liability (and the terms) were from the time in the public sector (remember those 250,000+ employees plus existing pensioners?). Contrast this with the Royal Mail where the pension liability has fallen firmly to the government. Only in the event of BT going insolvent (something the government would no doubt wish to avoid) would the “Crown Guarantee” come into play. Such a final backstop is hardly of any benefit to the shareholders.

  3. Avatar fastman2 says:

    Any worth noting in 1984, the freshly privatised BT had over 250,000 staff. I think the latest figures (in the UK) is less then 70,000 (with about 19,000 employed outside the UK

    the business has done that through grown and reduction in layers and being much leaver and investing and reinventing itself interestingly none if this “Savang Cost cutting” as you call it have been made redundant — people have left under leaver schemess– one of the biggest one was soverign when 20000 people went on a single day in aorund 1991/1992 as a asdie a large amount of work has been insourced over the last 2 -3 years as well

  4. Avatar Ignitionnet says:

    Awesome work how the company has increased its value so much despite the unprecedented, massive, almost interstellar investment in SFBB.

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