Employees at supermarket retailer Asda have received a return from the organisation’s sharesave scheme, totalling £62 million. This affects approximately 25,000 members of staff.
Sharesave schemes allow eligible employees to save directly from their salary over a set number of years, at the end of which they can either take this money and a tax-free bonus as cash, or use it to buy shares at a discounted price which is calculated at the beginning of the scheme.
Asda's 2016 sharesave plan enabled employees to save between £5 and £300 per month over a three-year period. At the end of this time, employees could opt to purchase shares in Asda’s parent organisation, American retailer Walmart, with a 20% discount on the 2016 market value. Staff subsequently had the option to sell these shares for a profitable return.
At the point of entry into the scheme, the option price, including a 20% discount, stood at £36.99; as of 1 July 2019, the price had increased to £87.12.
An employee saving £70 a month into the share scheme, therefore, would have saved £2,520 of their own money during the three-year period, but choosing to make use of the option to buy and sell shares for a return would see this rise to £5,924.50. Individuals saving the maximum amount of £300 a month are now able to receive a £25,353.42 award, creating a £14,553.42 profit.
Hayley Tatum, senior vice president, people at Asda, said: “Giving our [employees] the chance to save each month, risk-free, is just one of our ways of saying thank you and a great way to ensure that they reap the rewards of their exceptional efforts.”
