ESB staff and pensioners to get €21m from power station sales
AROUND 10,000 current and retired ESB staff are in line for a €21m windfall from their share of dividends that the Government has ordered the semi-state to pay from the sale of power stations, the Sunday Independent has learned.
The ESB workers could enjoy gains averaging €2,000 each as early as next year if the Government gets its way and extracts the €400m "special dividend" from the power company in 2014 from proceeds of asset sales.
Unions at the ESB are opposed to the sale of assets, unless a deal is done on the group's controversial pension scheme – which is at the heart of a looming strike.
The ESB group of unions served notice of strike action on the company last week that could mean power outages from December 16 – a potential disaster for retailers in the crucial weeks before Christmas.
But the Department of Public Enterprise and Reform has confirmed that dividends to the State must be matched by a payout to the ESB's Employee Share Ownership Plan (ESOP).
That's because the State owns 95 per cent of the ESB, while the employee ESOP holds the remaining five per cent.
Any dividend must be shared proportionately by both sets of shareholders, according to a spokeswoman for the Department of Public Enterprise and Reform.
It means if €400m is paid out to the Exchequer, as ordered, a further €21m has to be paid to the staff share scheme. Not all current staff would gain and as many as half the beneficiaries are actually pensioners, the Sunday Independent understands.
The shares were given to ESB staff under various deals struck between unions and the company in the Nineties.
The Irish Independent reported on Friday that ESB staff would receive individual payments worth hundreds of euro in the coming weeks, also under profit-sharing schemes dating back to 1996.
It is understood that new employees did not receive shares, however, as they were not party to the earlier labour agreements.
While the employee share ownership trust is entitled to 5 per cent of any payout to shareholders, this does not mean an automatic payout for the members themselves.
The employee trust can hold on to the cash, or a share of the cash, and invest it for the future benefit of the members. Management of the ESOP declined to comment on the potential windfall yesterday.
Next year's potential payout would be a one-off, in terms of its size, but the ESOP looks set for further significant gains. The Government struck a deal with the board of the ESB in October that will see increasingly large annual dividends being extracted from the profitable business.
Under the new targets the ESB's annual dividend will increase from the 30 per cent of profits that is currently paid out to shareholders to a 40 per cent payout rate.
The rise in dividends is due to take place between 2015 and 2017.
Members of the ESOP will share in those payouts, just as they gain from the special dividends.
However, the actual level of payments will depend on profits at the majority state-owned group.
In its latest financial results – for the first six months of 2013 – the ESB made a profit of €187m after tax.