15 November 2019
myroyalmail is updated daily

Jargon Buster

Annual general meeting (AGM)

A formal meeting held each year that allows shareholders to vote on resolutions and ask our board of directors questions.  

Capital gains tax (CGT)

This is a tax that is normally paid on gains made when shares are bought and sold. Capital gains tax is not paid on shares held in a SIP. However, if you hold your shares outside the SIP, you may have to pay CGT. Every person has a yearly CGT allowance and you will not have to pay CGT on any gains you make below your allowance. The allowance for the 2016-2017 tax year is £11,100.

Dividend

A dividend is a portion of a company’s profits that it pays to its shareholders.

Our Board will decide when and how often we will pay them to shareholders, and how much these dividends will be. This will depend on many things, including our company’s performance and future investment plans.

Equiniti

The administrator is Equiniti Limited. Their role is to oversee and administer the Royal Mail Employee Share Offers and also the Royal Mail share register.

Income tax

The tax you pay on all income you receive, including shares you hold in a SIP in certain circumstances. The rate of income tax you pay will depend on your income.

National Insurance

You pay National Insurance to build up your entitlement to certain state benefits, including the State Pension. Like income tax, National Insurance is paid out of the income you earn at rates, and up to limits, that are set by Parliament.

Resolution

Decisions at an Annual General Meeting (AGM) are made by resolution. The business usually conducted at an AGM is to receive and consider the financial statements, to re-elect directors, to declare any final dividend and to authorise the directors to fix the remuneration of the auditors. 

Retire

Our current policy on retirement for the purposes of the SIP is that any resignation, where you are aged 60 or over and stop working, will be treated as retiring. However, this only applies to the SIP and for other benefits retirement may have a different meaning. You should also note our policy on retirement may be different when you stop working, which could be many years away.

Share

A share is a single unit of ownership in a company. Once you own a share, you own part of the company. The more shares you own, the more of the company you own.

The value of a share is determined by the price at which it is traded on the London Stock Exchange.

This price is defined by the market’s view of the business, its prospects and general market conditions.

The company will have no say in the value of shares which is independently determined.

Employees will be able to see the value of Royal Mail shares they own every day the stock market is open.

Share Incentive Plan (SIP)

A Share Incentive Plan is a way of holding shares in a tax-advantaged way. Many companies operate SIPs for their employees.

The Government has awarded Free Shares under a SIP. Participating employees are required to hold their Free Shares for at least three years from each allocation date before they can be sold, except in certain circumstances. Full tax benefits are only available if the shares are held for at least five years.