PROFIT RELATED BONUS SCHEME UPDATE

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Dave Ward Cwu

PROFIT RELATED BONUS SCHEME UPDATE

Our expectations were never high about the profit scheme. Securing the 2.8% was always the priority. We will now focus on negotiating and holding the company to account on the committment to introduce new incentive arrangements.

Dear Colleague

PROFIT RELATED INCENTIVE SCHEME

All CWU Postal Branches will be aware that until a new incentive scheme is finalised, an interim position was secured that put in place a one year profit related incentive arrangement directly linked to business performance – specifically over achievement of the company’s operating profit target.

The results of the scheme for 2014/15 are as follows:

1. The company operating profit target for incentive payments in 2014/15 was £620 million before transformation costs.

2. The profit before incentive payment and at the budgeted foreign exchange rate was £628 million, meaning that the over achievement pot created to share amongst employees was circa £8 million.

3. At the actual foreign exchange rate and post incentive payment the reported profit was £611 million.

4. The scheme covers all CWU Represented grades across the Royal Mail Group (including Parcelforce).

5. The £8 million pot is divided by the total number of full time equivalent staff (adjusted to include part timers’ overtime hours) of 117,868 FTE’s. This equates to a payment of £61 per full time employee.

6. Payment is pro-rata for part timers, although payment will be based on the actual hours worked by individual part timers over a 12 month reference period, where this is higher than their contractual hours.

7. Payment will be made on 26th June for weekly paid staff and in June salaries for monthly paid.

We have attached to this LTB a communication that should be copied to CWU members in the workplace.

We have also been advised by the company that eligible full time employees with 729 free shares, will also receive a dividend of around £104 on the 31st July 2015.

It is important to emphasise to CWU members that the interim profit related scheme was a holding position until such time as new incentive arrangements are finalised. As such, expectations were never high as to the payment that could be generated, particularly given it was always related to over achievement of the company’s stated profit target.

We should remind CWU members that the union’s priority for 2014/15 was to ensure the 2.8% basic pay increase was delivered in full irrespective of the inflation review clause. Going forward the union will now prioritise negotiations to hold the company to account on the commitment to introduce new incentive arrangements.

Any enquires on the content of this LTB should be addressed to the Acting Deputy General Secretary, Ray Ellis.

Yours sincerely

Ray Ellis Dave Ward
A/ Deputy General Secretary (P) General Secretary

TO ALL CWU MEMBERS IN ROYAL MAIL GROUP – 2014/15 PROFIT RELATED INCENTIVE SCHEME

Until new incentive arrangements are finalised, an interim profit related scheme was secured for the period 2014/15. The scheme was directly linked to over achievement of the company’s operating profit target creating a pot for employees to share. Results are as follows:

1. The company operating profit target for incentive payments in 2014/15 was £620 million before transformation costs.

2. The profit before incentive payment and at the budgeted foreign exchange rate was £628 million, meaning that the over achievement pot created to share amongst employees was circa £8 million.

3. At the actual foreign exchange rate and post incentive payment the reported profit was £611 million.

4. The scheme covers all CWU Represented grades across the Royal Mail Group (including Parcelforce)

5. The £8 million pot is divided by the total number of full time equivalent staff (adjusted to include part timers’ overtime hours) of 117,868 FTE. This equates to a payment of £61 per full time employee.

6. Payment is pro-rata for part timers, although payment will be based on the actual hours worked by individual part timers a 12 month reference period, where this is higher than their contractual hours.

7. Payment will be made on 26th June for weekly paid staff and in June salaries for monthly paid.

Free Shares Dividend
We have also been advised by the company that eligible full time employees with 729 free shares will also receive a dividend of around £104 on the 31st July 2015.

CWU KEY MESSAGES

• Given that the interim scheme was always based on over achievement of the company’s stated profit target – expectations were never high that the scheme would produce significant payments.

• In 2014/15 the union’s priority was to secure the full 2.8% basic pay increase irrespective of the inflation review clause.

• The interim scheme was a holding position and CWU is now prioritising negotiations to hold Royal Mail to account on the introduction of new incentive arrangements. Further information will follow in due course.