No money will change hands in the proposed employee share ownership plan (ESOP) at An Post, which will grant some 14.9 per cent of the company to its 8,500 workers. Worth £22 million (€28 million) to the staff, or some £2,700 per person, the deal is aimed at generating annual savings of £27 million by 2003.
The plan values the company at £150 million and it is to be put to a vote of the Communications Workers Union, An Post's largest, next month. No consideration will be paid for 5 per cent of the company and the remaining 9.9 per cent will be "earned" though work changes.
The agreement is viewed as a profit-sharing scheme - if profits do not rise, workers will not be entitled to their shareholding.
According to An Post's chief executive, Mr John Hynes, the valuation reflects about half of An Post's net worth. This valuation was chosen because there were no plans to float An Post on the stock market, he said.
The figures were arrived at after an analysis by consulting firm KPMG. A study by PricewaterhouseCoopers reached a similar conclusion, a Government spokesman said.
According to the an internal document on the ESOP seen by The Irish Times, the company wants to use savings on the company's overtime bill to generate annual profits of £25£30 million.
This would represent a significant improvement on its performance in 1999, when An Post returned a pre-tax trading profit on ordinary activities of £11.7 million. The company's result last year was boosted by the sale of PostGEM and Ireland OnLine to Esat, which generated a profit of more than £107 million.
Dependence on overtime has long been a difficult issue for An Post. "This will no longer be a sustainable strategy from a business perspective into the future," said the internal document.
It added that other ESOP models, where staff acquired a 9.9 per cent share of a company through a combination of a commercial loan and a pension contribution "will not work" at An Post.
"Given the low `value to employee ratio', the pension contribution model would be inappropriate," it said.
