GEC uses shares handout to retain employees

GEC is spending £160m to give all 50,000 of its employees an option for 1,000 shares each. The investment is aimed at attracting and retaining top engineers in face of impending staff shortages. In a Royal Academy of Engineering lecture last month, GEC chairman Lord Simpson predicted a 30% increase in UK demand for IT […]

GEC is spending £160m to give all 50,000 of its employees an option for 1,000 shares each.

The investment is aimed at attracting and retaining top engineers in face of impending staff shortages.

In a Royal Academy of Engineering lecture last month, GEC chairman Lord Simpson predicted a 30% increase in UK demand for IT engineers by 2002. He pointed out that the number of A-level Physics students has fallen 27% in the past decade – trends which could damage the economy without `long-term action’.

The company’s share scheme, thought to be the largest affecting a British group, will bring GEC’s incentives in line with the US, where the company does over half its business.

The share option will be pegged to the company’s performance. Staff will only be able to sell the shares when the share price of Marconi – the name the group will adopt after the merger of its defence business with British Aerospace – doubles. The board expects this to happen within three to five years.

Employees could previously buy shares at a discount, while several thousand managers had share options.

Vodafone ran a similar scheme last year, offering free shares worth half of an employee’s salary to its 7,500 permanent UK staff. Share values have nearly doubled since the launch of Vodafone’s scheme.

* A GEC pilot scheme to retrain staff with no paper qualifications as software engineers has led to 16 employees graduating from the University of Greenwich this summer. Of these, 10 have already found skilled jobs within the group.