For Bank of Scotland and Royal Bank of Scotland workers, the chance to buy discounted shares in their employer seemed a no-lose deal. Schemes such as the Sharekicker plan at HBOS, which allowed employees to buy the bank’s shares with their bonuses and get 50 per cent more free shares after three years.
In December 2007, the HBOS share price was 741.5p. A year later, after its takeover by Lloyds, it had plunged by more than 90 per cent to 69p, giving thousands of employees who had taken up the Sharekicker plan not only their jobs to worry about, but their savings.
Many staff were confident of prosperity-laden future of their employer and invested much of their cash back into the very company they worked for. The tragedy is that when things went pear-shaped, many lost both their jobs and their savings.
The Deputy Prime Minister talked of a democratic share ownership culture. A lot of bank workers can be forgiven for feeling cynical towards Nick Clegg’s proposal for employees to have a universal right to ask for company shares.
How much say in the running of HBOS, RBS and Northern Rock did the thousands of employees who owned shares in those firms have? Not even 100 per cent take-up would give a workforce sufficient ownership to earn a voice loud enough to be heard. Groups of individual shareholders can’t come close to the ownership held by pension schemes and other institutional investors, who have been found badly wanting as far as accountability is concerned.
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