An Employee Share Ownership Plan (ESOP) was put in place in the ESB in 2001. The ESOP was an element of the Cost and Competitiveness Review (CCR) agreed between the Government, ESB Management and ESB Group of Unions in 1996. Under the CCR, 5% of the shares in ESB were made available to employees, without actual cash transfer from the employees in return for specific, substantial, verifiable, future changes to be delivered.
The terms of the ESB ESOP are in line with Government policy and Revenue rules on Employee Share Ownership Plans, which also applies to ESOPs in other semi-state companies. Under the terms upon which the ESOP was established, ESB has no ability or rights to exert control over the assets or management of the trustee company, which is chaired by an independent professional trustee director, with two trustee directors representing the company and four trustee directors representing ESB employees.
Responsibility for the management and operation of the ESB Employee Share Option Programme (ESB ESOP) therefore rests with the ESB ESOP Trustees (ESOT) and I have no role or function in the matter.
An ESOP is designed as a tax efficient mechanism to enable company employees to acquire shares in that company or its parent company. In acquiring shares, this mechanism enables employees to share in the success of the company, in terms of aligning their goals with those of the company and for their shareholding to have a positive impact on the company and its future. Alignment of objectives is particularly important in the current climate as ESB seeks to address several difficult challenges while also seeking to continue to innovate and invest for the future.