Banking group HBoS has announced plans to award its 60,000 staff free shares worth a total of £3,000.
The shares will be handed out from May 2005 through a scheme that is replacing a staff options arrangement.
Employees at the Halifax, Bank of Scotland, Birmingham Midshires, Clerical Medical and Intelligent Finance divisions will receive annual amounts of shares based on the banking group’s performance.
Next year’s payments will be 5 per cent of annual salaries, with a minimum grant of £500 and a maximum of £3,000, the ceiling the Inland Revenue has set as tax free.
To be free of tax and National Insurance, the shares must be held for five years.
However, employees will be free to sell them under the rules of the HBoS scheme after three years.
HBoS spokesman Shane O’Riordain said the first award of 5 per cent reflected the group’s success.
“We think our colleagues are a very significant driver of our business and it is right that they share in our success,” he told the Financial Times.