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TESCO STAFF SHARE IN £126 MILLION PAYOUT FROM SAVE AS YOU EARN SHARE SCHEME

Tesco

9 February 2009

A better
return on investment than a high street saving
account
While the Bank of England’s base rate is at its lowest level
in 300 years and high-street savings rates are at their lowest
level since 1995*, employees at Tesco are this month reaping the
rewards of saving in 5 and 3 year Save As You Earn share schemes
that have delivered returns of 88% and 45%
respectively.
Over 52,000 members of staff, who have saved between £5 and
£50 a month, are sharing a £126m payout. More than
eight thousand top savers, who have contributed the maximum
£50 every month for the past five years, a total of
£3,000 each, will receive more than £5,638. The strong
return reflects the fact that, even in difficult market conditions,
Tesco’s share price has remained resilient closing at
£3.47** on 2nd February when the two schemes
matured.
This means the schemes far outperformed returns from high street
savings accounts. If the same money had been saved in an account
tracking the Bank of England base rate for the past five years the
return would be just 12%.  With the base rate fluctuating
between 5.75% and 2% between 2003 and 2008, employees who had
invested the equivalent annual amount of £600 in a high
street account since the end of 2003 would have earned just
£373 on their investment compared to £2,638 from
Tesco’s SAYE scheme.
David Potts, Retail Director for Tesco commented;
“Tesco’s Save As You Earn scheme has yet again proved
it really delivers. Despite the fact that they have good jobs, our
staff are not immune to rising household costs and financial
worries.
“The returns on this investment are well deserved by our
staff and I am delighted that they are being rewarded for the
performance of the company and the investments they themselves have
made.”
- ENDS -

NOTES TO
EDITORS
* Bank of England, 12th January 2009
** Closing price, 2nd February 2009, Closing price,
3rd February 2003 = £1.71
Case studies available
About the
schemes:
Under the SAYE scheme, Tesco employees with a minimum of 12 months
service can contribute between £5 and £50 of their
salary into the scheme every four weeks for a period of three or
five years.  When the scheme matures, each employee receives a
tax free cash bonus and they are given the option to reinvest the
total amount to buy Tesco shares at a discounted option price set
when they joined the scheme.  Employees then have the choice
to sell their shares immediately or keep the shares to sell at a
later date.
Employees who joined the scheme five years ago can buy shares at
the 2003 option price of £1.95 each, while those who joined
the scheme three years ago can buy shares at the 2004 price of
£2.48.
For more information please call Emma Bowden/James Staunton at The
Wriglesworth Consultancy: 020 7427 1400
e.bowden@wriglesworth.com
Or the Tesco
press office: 01992 644 645