Yes. The contribution limits on sharesave schemes have remained unchanged since the early days of the scheme. At that time, there was probably a view on how much of an employee’s income it was prudent for them to save for investment in the shares of their own employer.
Unless that view has changed as a result of situations like Enron in 2001, it would seem reasonable to increase the limits in line with the increase in average wages. The fact that it has not been moved is probably an oversight, rather than a deliberate policy, to limit the amount of money employees can invest in their company.
We find that the majority of BP employees who sign up for our sharesave scheme contribute at the maximum limit. It seems to be a comfortable number for them, and I am sure some would save at a higher level if it became available. The main purpose of employer share schemes is to encourage employees to be owners in their own companies, and this is an easy way to do it. If they are taking a measured gamble in the future of their company’s share price, it means they have an interest in the company doing well, which is what we, as an employer, want.
The share incentive plan (Sip) limits are also quite low. That said, contributions come from pre-tax income, so if these were to increase, it would effectively be the government subsidising the increase, and we cannot see that happening in this economic environment.
- Peter Vassallo, head of global reward operations at BP
