eircom ESOP

[TarfHead]

In the context fo banging on about the Aer Lingus flotation, Senator Shane Ross was making reference to the eircom ESOP, on Newstalk 106 yesterday.

I wasn't sure if I heard him correctly but what I though he said was that each member of the ESOP gets a tax-free payment of €12,500 per annum.

Is this correct ? If not, when does a member of the eircom ESOP get a payout from membership ?

 

[MB05]

I work for eircom and there is always an awful lot of rubbish in the media about our ESOP shares. We have a set amount of shares that are distributed to us in a tax efficient way. The ESOP done a deal with the Revenue Commissioners so that we can get up to €12700 (10000 punts) a year tax free per annum until the shares are gone.

The papers are always quoting crazy figures in relation to our ESOP but we haven't received anything like the money they quote(80k+) In total since 2002 we have received about 35-40k. We haven't received the full 12.7k every year. They have to pay off the loans etc or reinvest our money so some years we only got 6k. The papers would have you believe we got all of this for nothing too. We got shares in exchange for drastic changes in work practices like reductions in travel & expenses, 50/50 time in lieu instead of overtime and we had to give up our annual bonuses and pay our own pension (eircom paid for it previously) etc. and we borrowed money to buy some of the shares etc. ESOP owes millions in loans.

This year we will get 8k.

 

[kirvos]

Hi, I can't imagine any contributor to AAM, or anyone for that matter, who would consider 'rubbish' of €35 to €40k to date (for turning up for work) and a similar amount to come and more, as anything but a gravy train. BTW, it's the rest of us who are stumping up this largesse for you privilaged lot.

For those of us who work in the precarious private sector, with no hand-outs, employment or salary guarantees, this kind of nonsense just sends us into apoplexy.

It just highlights the 'two tier' economy, the can't be fired, pensionable, benchmarked and guaranteed national pay agreement public sector, ---and us idiots (as least that's how we're treated) who toil in the can be fired, pay your own pension, no benchmarking (vis-a-vis public sector) and inability to pay claim by our employers scenario.

How neat of the Government (on the taxpayers' behalf) to agree a tax free deal for the ESOT. Thanks Bertie, a lot done amd more to do, but not for the paying public. K

 

[dam099]

For those of us who work in the precarious private sector, with no hand-outs, employment or salary guarantees, this kind of nonsense just sends us into apoplexy.

I actually agree with you that the Eircom ESOP was an overly generous deal for the workers at the expense of the taxpayers but I would point out Eircom is also a private sector company now (albeit one with a dominant market position).

 

[Calina]

I don't think the second poster considered the money that he received from his or ESOT as rubbish, merely the figures bandied about by the newspapers. Having read Shane Ross's writing on some of the figures relating to my pension, I can fully sympathise. They bear little or no relation to reality.

The way ESOTS operate is such that anyone who states simplistically that someone gets X amount tax free per annum is not being strictly speaking accurate. As such I would bear in mind that when newspapers are quoting figures, they are also quoting angles. Of all the business writers around, Shane Ross is the least balanced in my opinion.

I'm not a fan of Eircom per se, I think their management has, since privatisation, left a shocking amount to be desired. But they are a private company and there is a sufficient amount of evidence surrounding the various sale and resales and removal from the Stock market and reflotation not withstanding the massive fall in their share price from day one to suggest that they are at the vagary of the market now.

 

[TarfHead]

.. We got shares in exchange for drastic changes in work practices like reductions in travel & expenses, 50/50 time in lieu instead of overtime and we had to give up our annual bonuses and pay our own pension (eircom paid for it previously) etc. and we borrowed money to buy some of the shares etc. ESOP owes millions in loans.

Thanks for the informed reply.

While the changes involved my have been drastic to many eircom employees, they would seem to be the status quo to many private sector employees.
The potential €12700 dividend is a significant perk and that is something not available to many in the private sector.

For the first time in many years, I have to admire the work of a trade union .

 

[bearishbull]

Thanks for the informed reply.

While the changes involved my have been drastic to many eircom employees, they would seem to be the status quo to many private sector employees.
The potential €12700 dividend is a significant perk and that is something not available to many in the private sector.

For the first time in many years, I have to admire the work of a trade union .

many of the union leaders involved with the eircom deal made millions in shares etc. it was taxpayers assets/money that the cwu workers received their money/shares from. even worse things happen in the likes of esb where the AVERAGE wage is 80k and workers have received gret deals on pensions and potential privatisation etc.once again public sector screwing the private PAYE worker.

 

[Purple]

again public sector screwing the private PAYE worker.

As it was then, is now and ever shall be... and no government will ever change it so just accept that the world is not a fair place and get on with it.

 

[Delboy]

We got shares in exchange for drastic changes in work practices like reductions in travel & expenses, 50/50 time in lieu instead of overtime and we had to give up our annual bonuses and pay our own pension (eircom paid for it previously) etc.

eircom still pays most of the pension you'll find, about 10.4% with the workers paying 4.6%. And those on definet benefit pensions, whilst contributing the 4.6%, will still get a defined benefit pension.
As for drastic changes in work practices - eircom workers now do what most would consider a 'normal day's' work. Pre-84 civil servants with eircom still get 2 'privilege' days a year off on top of their holidays.
Flexi-time still applies to a lot of workers who had it before in the 1st floatation.
And there are numerous and very generous voluntary leave programmes held every year.
So I don't think a whole lot has been given up for what will turn out to be a minium 80k tax free pay-out to eligible staff, most of whom no longer work for eircom.

 

[cerberos]

"The union conspired with venture capitalists to asset strip something the Irish taxpayer invested in over many years"

At least the venture capitalists don't not pretend to have anybody's elses interest in mind (poor, weak, social justice, etc). It show the Unions as a bunch of begrudgers who will hop into bed with anyone to hijact a state asset)

It was a disgrace, the money belonged to the country and I consider it stolen from the people. (else sell it and build shelters, schools,etc) and tpo cap it off the Revenue did a deal to give them 12700 tax free per annum. (Whats that Gross??)

Who else can get that deal from Revenue?

 

[Meccano]

BTW, it's the rest of us who are stumping up this largesse for you privilaged lot.

For those of us who work in the precarious private sector, with no hand-outs, employment or salary guarantees, this kind of nonsense just sends us into apoplexy.

My question to you Kirvos is - why are you in the private sector?
If you think the public sector is where the money is - why don't you just join them instead of bitching?

The talk about Eircom staff shares is just a distraction. The ammounts are PIDDLING when held up against the millions already made by the fat-cats who were handed a state assett on a plate by the government. A state assett which has been assett stripped and run into the ground to allow the carpet baggers to make their fast buck.

The result is a country with one of the worst telecomms systems in europe. Even basket cases like Portugal have better BroadBand penetration than us.

Its also laughable to read criticism of the unions at Eircom claiming they "conspired" with the venture capitalists, while Aer Lingus unions are being lambasted for resisting a sell-off.

If I was in Eircom or Aer Lingus, I'd screw every last penny I could from this kind of deal. The new owners certainly will.
So would you, if you were honest enough to admit it.

 

[shnaek]

"The union conspired with venture capitalists to asset strip something the Irish taxpayer invested in over many years"

At least the venture capitalists don't not pretend to have anybody's elses interest in mind (poor, weak, social justice, etc). It show the Unions as a bunch of begrudgers who will hop into bed with anyone to hijact a state asset)

It was a disgrace, the money belonged to the country and I consider it stolen from the people. (else sell it and build shelters, schools,etc) and tpo cap it off the Revenue did a deal to give them 12700 tax free per annum. (Whats that Gross??)

Who else can get that deal from Revenue?

Hear hear. This is exactly it. And to suggest the unions at Aer Lingus will do anything different is nonsense. Their resistance is more to do with positioning so they can get as much money for themselves and their members as possible. It has long been the case that we don't really have a democracy at all, just some puppets to be manipulated by the unions and civil servants that really run the country. We see where this mentality has landed France and Germany. Be certain it will land us in the same place.

 

[Meccano]

Thats utter tosh shnaek. We're the second richest country in the world according to the latest statistics! The unions were part of that success.

Looking at the Big Picture - those countries with strong unions are often the most succesful (Ireland, US, UK etc), while those without unions are often economic basket cases riven by poverty (S.America, India, Africa etc)

Unions are usually present in LIBERAL DEMOCRACIES, where there is fairness and equal opportunity in society. People have the incentive to work.

Without fairness in society there is none of the stability that business needs to flourish. The result is all-round impoverishment and social strife.

We had it in Ireland and the unions played a lead role in the social change that had to happen to create todays Celtic Tiger.

I know France very well, and while an out and out Capitalist might despise their unions and laid back life-style, that is a choice the French have made for themselves. The French are fully conscious of this choice.

France may not be YOUR idea of a capitalist nirvana, but they have a far higher standard of living than many parts of europe (including Ireland) and they don't want to be on the kind of treadmill that the American model brings.
Thats their choice, and I say - good for them.

Meanwhile the Irish fall over themselves to sample the French Joie De Vivre. Its the Number 1 tourist destination in the world.

You believe the unions have wrecked this country? I forecast that if the unions were gone this country could slide down the drain into social unrest. The seeds are already there with the impossible cost of housing for young people.

The solution to the Aer Lingus crisis is simple - call off the sale, then no union members get anything. That'll learn 'em.

 

[cerberos]

Germany

 

[Purple]

The unions were part of that success.

Why do you say that? Is it because they agreed not to hold the country to Ransom for a few years as long as they called the shots?

Looking at the Big Picture - those countries with strong unions are often the most successful (Ireland, US, UK etc), while those without unions are often economic basket cases riven by poverty (S.America, India, Africa etc)

That is a nonsensical proposition. It's so sweeping as to be meaningless. Africa is not a country and to suggest that it can be treated as a single entity for any comparison is ludicrous.

Unions are usually present in LIBERAL DEMOCRACIES, where there is fairness and equal opportunity in society. People have the incentive to work.

India is a liberal democracy and has vast inequality, China is a police state and has far less absolute poverty.

Without fairness in society there is none of the stability that business needs to flourish. The result is all-round impoverishment and social strife.)

Like China and Singapore?

We had it in Ireland and the unions played a lead role in the social change that had to happen to create todays Celtic Tiger.

What did they do?

I know France very well, and while an out and out Capitalist might despise their unions and laid back life-style, that is a choice the French have made for themselves. The French are fully conscious of this choice.

France may not be YOUR idea of a capitalist nirvana, but they have a far higher standard of living than many parts of europe (including Ireland) and they don't want to be on the kind of treadmill that the American model brings.
Thats their choice, and I say - good for them.

That's why they have race riots and one of the worst records in supporting states that abuse human rights?

Meanwhile the Irish fall over themselves to sample the French Joie De Vivre. Its the Number 1 tourist destination in the world.

What has that got to do with anything? People go for the climate and the historical heritage they accumulated when they were an aggressive imperialist power.

You believe the unions have wrecked this country? I forecast that if the unions were gone this country could slide down the drain into social unrest.

Like France?

The solution to the Aer Lingus crisis is simple - call off the sale, then no union members get anything. That'll learn 'em.

Why is that the solution? Will the company suddenly have a future as a small state owned airline on the periphery of Europe or will it continue to be run by trade unions and former school teachers?

 

[shnaek]

Thats utter tosh shnaek. We're the second richest country in the world according to the latest statistics! The unions were part of that success. .

According to a very debatable publication from a vested interest.

Looking at the Big Picture - those countries with strong unions are often the most succesful (Ireland, US, UK etc), while those without unions are often economic basket cases riven by poverty (S.America, India, Africa etc).

The US has strong unions? That is news to me. I was under the impression that since Reagan the power of the unions in the US is considerably less than it is here and in Europe. The US values flexibility of labour.

Unions certainly had a part to play in the past, where corruption was rife - as it does in the very poor areas you mention. But here in Ireland, and to a greater extent in Europe, unions are only looking after their own self interest and the self interest of the public sector. They don't give a damn about the ordinary working folk.

We had it in Ireland and the unions played a lead role in the social change that had to happen to create todays Celtic Tiger.

The unions played a role, but not a lead role. They collaborated with goverment and other social partners, and fair play to them. But these days all I see is unions with short term views, looking for short term gain. Where are the visionary trade unionists - or is this an oxymoron?

I know France very well, and while an out and out Capitalist might despise their unions and laid back life-style, that is a choice the French have made for themselves. The French are fully conscious of this choice.

No body could argue against a laid back life style - unless you are out of work. What incentives do employers have to employ people in a country where the cost of labour is so high?
I have French friends both working in France and working here. Some of them have spent years unemployed because of the lack of flexibility in the labour market. That lack of flexibility protects those with jobs, but does nothing for those looking for work.

France may not be YOUR idea of a capitalist nirvana, but they have a far higher standard of living than many parts of europe (including Ireland) and they don't want to be on the kind of treadmill that the American model brings.
Thats their choice, and I say - good for them. .

I'll thank you to keep your personal comments to yourself. Just because I express an opinion on something doesn't mean you've got me all sussed out. Stick to the points and keep things objective.

Meanwhile the Irish fall over themselves to sample the French Joie De Vivre. Its the Number 1 tourist destination in the world.

Nothing to do with unions. More to do with food, wine, coastline, scenery, weather, Paris, skiing.....

The seeds are already there with the impossible cost of housing for young people.

What are the unions doing about that? Ensuring their own members can afford them no doubt. I haven't heard any unions call for stricter regulations on lending for example.

 

[GeneralZod]

...not withstanding the massive fall in their share price from day one

The share price didn't fall from day one. A few lucky/clever people realised that the Government had priced the flotation too high and got out early with a nice profit. The subsequent global tanking of telco & telecomms shares was beyond the power of anyone to stop and the Government can't be blamed for the scale of the fall in value.

 

[Guest127]

I dont work for Eircom never did and never will. So I will never and have never shared in this esop thingy. BUT I dont begrudge the workers whatever share of the company they have managed to attain by whatever means was open to them. Contrast Tony O'Reilly and his gang who were only ever in Eircom to see what they could get out of it and then make a hasty exit and workers who might work up to 40 years and DO have the interest of the company at heart. Because I dont have something doesn't mean I begrudge others who have.

 

[Meccano]

Well said cuchulainn, my point exactly.

As to the other two blasts of agression - cool it, I'm not going to get hot under the collar about something that doesn't bother me all that much. I'll just respond in a nice friendly manner, which you can try later for yourselves.

According to a very debatable publication from a vested interest.

Which publication are you referring to? The UN HDR? "The 2005 Human Development Report, published by the UN Development Programme yesterday, found Irish people to be the second wealthiest in the world, with a GDP per head of $37,738 (€30,384)."

Why do you say that [The unions were part of that success].
? Is it because they agreed not to hold the country to Ransom for a few years as long as they called the shots?

Perjorative language Purple. Tsk Tsk. Its called The Partnership Approach.

The unions played a role, but not a lead role. They collaborated with goverment and other social partners, and fair play to them.

I was referring to the origins of the union movement in this country, to which the very independence of this State is inextricably linked.

The US has strong unions? That is news to me. I was under the impression that since Reagan the power of the unions in the US is considerably less than it is here and in Europe.

This is way to complex to deal with in a few lines.
Unions in the States have certainly been under attack (read anything on the subject by Noam Chomsky for some real analysis), but they are still as strong or stronger than in europe.
Here's a short list: [broken link removed]

Fact is, they're still there and they're still influential. I'm quite prepared to accept however that the waning of union power in the US is parralleled by the waning of democracy in that nation.
A worrying illustration of my exact point.

But here in Ireland, and to a greater extent in Europe, unions are only looking after their own self interest and the self interest of the public sector. They don't give a damn about the ordinary working folk.

Errr...people in Unions ARE the 'ordinary working folk'! I don't know many corporate accountants, multi-national CEO's or millionaire property developers in the unions. They don't need 'em, do they!

Africa is not a country and to suggest that it can be treated as a single entity for any comparison is ludicrous.

Sigh...I was just trying to be brief.
Go ahead so, knock yourself out, pick your own list of succesful African COUNTRIES then and prove me wrong. There's only ONE which has had ANY economic stability - and guess what? Yep, South Africa has Unions.

India is a liberal democracy and has vast inequality, China is a police state and has far less absolute poverty.

Thats more nonsense. For a start, India may be a DEMOCRACY, but it is not LIBERAL. In fact India has been more like a Marxist state until very recently. Unions were not permitted, and I'm not sure they are yet. As to China - what is 'less poverty'? Less than who? India? Wow...thats really saying something then, eh? According to the UNHDR - 16.6% of the Chinese population live on less than $1 a day, and at $2 the figure jumps to over 46%. See here: [broken link removed]

Regarding France.
The recent protests/riots against the proposed changes to worker legislation were not led by unions - but by students and young people teeing up for their first venture into the labour market. They don't want to be steam-rollered onto a capitalist treadmill. Thats their choice - they know the consequences.

The race riots in les banlieus were exactly that - RACIAL riots.
France has a major problem in some cities with immigrant youth who cannot integrate into French society. Muslim anger and growing Islamic fundamentalism has a lot more to do with the problem than lack of jobs.

All those things the Irish love about France, the food, the wine, the laid back lifestyle - would be far less FRENCH if they follow the British/Irish/American model. If Paris was more like Detroit, who'd want to go there?
As to the weather - you don't blame the unions for that too?

 

[Observer]

........and tpo cap it off the Revenue did a deal to give them 12700 tax free per annum. (Whats that Gross??)

Who else can get that deal from Revenue?

Actually I hate to confuse such a well thought out argument with mere facts, but the "deal" from Revenue is available to ANYONE. Yes, any employer can set up an approved profit share scheme (APSS) and any employee can benefit to the tune of €12,700 (£10,000 in old money) per annum in a tax efficient manner. The APSS concept has been part of tax law for many years and long predates the eircom ESOP. The eircom ESOP is essentially no more than a facility to hold shares in trust for employees which are subsequently distributed through a standard APSS scheme.

Some special tax benefits were conferred on Employee Share Ownership Schemes in 1998. These do no more than allow an ESOP to hold shares in trust, to borrow in order to acquire shares, to receive dividends etc. and to do these things in a tax efficient manner. They are relatively minor in comparison to the tax efficiency of an APSS. Again, of course, these benefits are available to all employers and employees even though the eircom ESOP was the trigger for their introduction.