ousands of BT employees profit from . billion share plan payout

DC14-353 1 August, 2014

Thousands of BT employees profit from £1.1 billion 1 share plan payout

Save-as-you-earn plan pays out shares worth an average of over £49,000 1 each for nearly 23,000 BT employees

Thousands of BT people across the UK are set to reap the rewards of an employee share plan payout worth more than £1.1bn 1, after a five-year plan matured today.

In 2009, nearly 23,000 individuals - mostly contact centre agents and engineers - joined a five-year saveshare plan under which they saved between £5 and £225 every month until July 2014. The plan matures today, meaning the accrued monthly savings can now be used to buy BT shares for 61 pence each. That was a 14 pence discount compared to the share price five years ago and a 327.5 pence discount compared to the share price of 388.5 pence when financial markets closed last night.

The gains the plan participants can make depend on how much they saved each month and on the share price on the day they sell any or all of the shares they have bought.

For example using last night's closing share price of 388.5 pence, the average gain for those selling immediately is £41,674. That is based on the £124 average monthly saving in the plan. Monthly savings of £124 will have built up into a total fund of £7,762, enough to buy shares which (as of last night) had a market value of £49,436 1.

Around 7,000 saveshare participants saved the maximum of £225 a month. Based on last night's closing price, the 23,090 shares these people can buy are worth £89,705 representing a gain of £75,620.

A number of BT couples who each saved the maximum into the saveshare plan can buy shares worth £179,410 1.

Gavin Patterson, Chief Executive of BT, said: I'm delighted that so many BT people are sharing in the company's success through our saveshare plan.

BT was facing tough times five years ago and this was reflected in the share price. We're in a much stronger place today and I would like to thank our people for the major part they've played in the turnaround of the company over the past five years.

The gains are a reward for hard work and for the faith shown in the company by BT's own people. When the plan was launched in 2009, the company had just issued two trading updates and the share price was at its lowest ever level - beneath 80 pence.

Nearly a third of BT's UK employees signed up for the plan. In total, they can now buy around 290 million shares at 61 pence each. Based on Thursday night's share price, this would suggest more than £1.1bn worth of shares available for BT folk to buy for around £177 million - making this one of the UK's largest broad-based employee share plan maturities ever.

Those benefitting from saveshare are from all parts of BT across the UK, with around 60% working in team member roles, such as contact centre work and broadband engineering. Close to half of the recipients are in BT's Openreach division.

Less than five per cent of shares being bought by sharesave participants today are being sold immediately. The gains people make will depend on the share price on the day of any eventual sale and how much it exceeds the 61 pence purchase-price, plus any dividends paid in the interim.

Saveshare is a key benefit for BT people in the UK. The company has been offering a saveshare plan every year. This gives people the opportunity to make monthly savings from net pay for three or five years (or both). At the end of the savings period they have the choice to buy BT shares at the discounted price, or receive their money back. They can give simple online instructions to sell the shares, or to keep the shares in an online account, transfer them to an ISA or put them into a company pension scheme popular choices with BT people.

1 Based on the BT closing share price on 31 July 2014 of 388.5 pence.

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