The An Post ESOP, which was signed in 2000, provided for the transfer of up to 14.9% of the company to employees on a phased basis in return for specified costs savings and profits. Of the transfer, 5% was for transformation and 9.9% was a profit share. The purpose of the ESOP was to facilitate the transformation of An Post into a viable and profitable postal operator in order to successfully deal with challenges arising from liberalisation and electronic substitution. In return for 5% of the company, cost savings amounting to €34 million were to be achieved between 2000 and 2003. However, instead of achieving savings the opposite has happened. Staff costs rose by €24 million between 1999 and 2000, which represents a 6% increase, by €52 million between 2000 and 2001, a 13% increase, and by €40 million between 2001 and 2002, an increase of 9%.
The table below sets out profits envisaged under the ESOP and the actual financial outturn for the company:
|
ESOP
|
Annual Report
|
|
€m
|
€m
|
|
2000
|
7.6
|
9.8
|
|
2001
|
8.9
|
(6.7)
|
|
2002
|
20.3
|
(17.8)
|
|
2003
|
34.3
|
(29.5) forecast
|
In May, 2003 the An Post board advised that cost savings for 2000 set out in the ESOP amounting to €7 million had been achieved. However, according to documentation supplied by An Post at that time, achievement of savings was substantially below target levels in the ESOP agreement, was delayed, and took place between 2001 and 2003 instead of in 2000. In September 2003, An Post advised, following a review of company finances, that forecast profit of €1 million had turned into a loss of €29.5 million. Having regard to the substantial losses notified by An Post for 2003, the board has been asked to review the cost savings verification process and respond to the Department. We are still waiting for a response from the board of An Post on the verification of the cost savings issue.
I read in last Wednesday's Irish Examiner that I had refused to meet with the unions to discuss the ESOP. This is not true. The unions did not request the meeting with me to discuss this issue. If any union wishes to meet me to discuss issues surrounding the ESOP, they may contact my office; my door is always open.
