BT saveshare maturity gives employees a wealth of choices

Mon 06 Oct 2014

With one of the biggest ever saveshare maturities seen in the UK, BT made a complex issue simple for its employees

BT is a global brand with over one million shareholders. A significant proportion of these people work for BT – the company has about 72,000 people in the UK, and 60% of them own shares.

One reason for that is the company’s “saveshare” plan.  BT sees saveshare as a key driver for employee engagement and invests substantial effort in the way that plans are designed, delivered and communicated.

Almost a third of BT’s UK employees took part in the company’s most recent saveshare maturity – a 5 year plan worth on maturity a grand total of more than £1.1 billion1.

The average participant paid in £124 pcm over five years, and saw the £7,762 savings turn into an investment worth over £49,000 (a potential gain of almost £42,000).  More than 7,000 people saved the maximum £225 pcm, and saw the value of their investment rise to almost £90,000 (a potential gain of almost £76,000)1.

Those running the plan realised that the potential beneficiaries needed to understand a range of financial issues they might not be familiar with – such as the potential Capital Gains Tax (CGT) implications – there was also the recent change in saveshare savings limits which BT increased to £300 per month.

To enable a high proportion of potential beneficiaries to absorb the details, a year-long communications strategy was created to ensure people made choices that were well-informed.

Research was carried out to find out when, how and in what form people would most readily absorb the necessary information.

The lessons from this resulted in a monthly series of personalised emails to participants on key topics with links to further information if desired.

The emails highlighted the potential gains each individual could make and dividend they could receive, which made the subsequent points about financial planning more salient.

People were thus more willing to invest time and effort in understanding matters such as CGT allowances, spouse CGT allowances, ISA allowances, the plan maturity date and the interaction with ex-div/ dividend record dates. 

The personalised emails were also combined with a whole series of other educational tools including: interactive booklets; Q&A’s; help sheets; online modelling tools; echats; and interactive newsdesk articles. And for the first time ever, the share plans team got the message across by way of broadcasting a live auditorium ‘Questiontime’ panel session, hosted by BT’s Company Secretary and attended by over 600 employees.  BT people attended in person or joined and asked questions online using the company’s intravision.

Personalised emails offered five maturity choices, all accessible and selectable via the Equiniti portal.  Choices could be selected individually or in combination as follows:

The Equiniti portal - online maturity options

  • Keep some or all in CSN (EasyShare)
  • Sell some/all straight away
  • Transfer some/all to spouse CSN
  • Transfer some/all to an Equiniti ISA 
  • Transfer to the BT Retirement Savings Scheme (SIPP pension)

So what happened?

  • Over 90% of employees gave instructions before the cut off for the first allotment
  • Participants exercised options over 269 million shares for the first maturity date
  • Less than 5% of the shares bought on the first maturity date were sold immediately
  • 13,000 employees put 127 million shares into CSN 
  • 3,700 employees sold some or all of their shares
  • 8,500 used a multiple choice option with 125 million shares
  • Over 5,500 Equiniti ISA account transfers took place (and a further 1,500 to non-Equiniti ISAs), as well as around 5,300 spouse transfers
  • There were 74 SIPP transfers

Carl Trimmer, Employee Services Delivery Manager at Equiniti, who manages the employee share plans tasks on behalf of BT, commented on the process: “There were no precedents to use when working on BT’s saveshare 10 maturity. Thousands of BT employees were looking forward to realising large profits and some had told us it was potentially more money than they’d ever had before or ever expected to see again. 

“As BT’s chosen partner, Equiniti was under massive pressure to turn around roughly 23,000 choices in tight timescales. We offered BT employees five choices and most people opted for more than one. We wanted to give people as much time to make their choices as possible, which added to the strain on our team. I am delighted with the way we were able to deliver to our schedule, service level agreements and customers’ satisfaction,” Carl says.

Francis O'Mahoney

Francis O’Mahony, Head of Employee Share Plans at BT says:

“Around one in three BT people had a saveshare plan mature on 1 August this year. Others in the industry tell me this is one of the biggest and most complex saveshare maturities they have ever seen, with the most flexible online choices ever offered.

 

“The Equiniti team was most responsive to our needs. We worked in partnership to build the choices, map each user journey and communicate effectively with the participants.


“With £1.1bn worth of shares under option on 1 August, I felt like I was facing the millennium bug all over again – we just didn’t know what was going to happen. The fact everything went so smoothly and that the BT share price remained stable, is testament to terrific team work.”

If you would like to find out more about this, please contact your relationship manager.

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

Ezine issue: October 2014