Tesco has introduced a new tax-free share-buying scheme for staff to take
advantage of the Government’s All Employee Share Ownership Plan (Aesop)
legislation.
The food retail giant announced the launch of the Buy As You Earn initiative
last week, which it hopes will help retain its employees.
When Aesop becomes law in December 2002 companies will no longer be able to
award shares under existing profit share schemes. Staff will not be able to
sell their shares tax-free for five years compared to the current three-year
limit.
Under BAYE the 180,000 part- and full-time Tesco employees who have worked
for the supermarket for three months or more can buy £5-£110 worth of shares in
the company at the market price every four weeks.
Tesco, which claims to be the first supermarket to respond to the new
legislation, said shares bought at an assumed price of £2.30 in February 2002
and sold in March 2007 at a share price of £4.02 would show a tax-free profit
of £34.50 per share.
Maryann Barnacle, reward manager at Tesco, said, "Having a stake in the
company helps keep staff loyal. Tesco has a long history of share ownership, as
it helps employees take an interest in the share price and link the
individual’s performance to the company’s.
"We are always keen to utilise government legislation to help our
staff."
For the first time Tesco has given employees the opportunity to apply for
shares online.
To make sure that all staff are aware of the new scheme Tesco mailed the
information to their home addresses as well as producing internal posters and
canteen table-top flyers.
Tesco HR director Clare Chapman said, "Our staff are key to our success
and we want them to be able to share in our growth in as many ways as
possible."
By Paul Nelson
