MPs attack plan for Royal Mail share payouts
The government should reject Royal Mail’s proposals to give up to 20% of the company’s shares to employees, an all-party committee of MPs has concluded.
The trade and industry committee said Royal Mail’s arguments about motivating staff “lacked robust evidence and were little better than mere assertions”.
Senior managers at Royal Mail, led by the chairman, Allan Leighton, have insisted the share scheme should be an integral part of its business plan. The group needs to tackle a huge pension fund deficit and invest in automating its letters business, through a combination of government support and higher stamp prices.
In its latest report on Royal Mail, published today, the committee said it was “surprised to hear that the management of Royal Mail has placed conditions on agreeing to the government’s financial package (in the form of a proposed employee share scheme) given that the company is technically insolvent because of its pension liabilities.
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