Tesco share slump hits staff share saving scheme
THE RECENT slump in Tesco's performance is set to hurt more than 50,000 workers who signed up to a share saving scheme.
They are expected to pocket far less than previously hoped after a dire Christmas trading performance and profits warning saw nearly £5bn (€6bn) wiped off the supermarket giant's share price in a single day.
Tesco said staff were disappointed that the scheme is not set to make the same kind of returns as previous years, but pointed out that none will lose money and can instead chose a cash bonus worth up to £275.
But if shares had stayed at the levels seen before last week's slump, the 54,000 staff would have been set to make gains of up to £762 - nearly three times as much.
Tesco has now told staff that have already opted to take their payment in shares that they can still change their minds and accept a cash bonus also available under the scheme.
Under the terms of the scheme, which matures on February 1, the UK's biggest private sector employer allows staff to save up to £50 a month for three or five years and then buy shares at a pre-agreed price, which in recent years has generated handsome returns.
But shares recently fell to a near-three year low, and are below a 'safety price' which means that staff who want their money at the start of February can instead receive a bonus. Alternatively, they can still take the shares and hang on to them in the hope that they make gains in the future.
A Tesco spokesman said: "We understand some staff will be disappointed the scheme has not delivered returns similar to recent years.
"We are giving any staff who may already have taken a decision to buy the shares the opportunity to issue a new instruction."
He added that staff have six months from February 1 to decide whether to take shares or a bonus. In that period, it is possible that the share price will again rise, he said.