About 14,400 Countdown staff today across 183 stores and distribution centres have each been given a share of $10 million worth of shares of parent company Woolworths Group.
Each eligible full-time staff member is set to receive $810 worth of shares. Part-time employees would be allocated a proportional number of shares.
Managing director Natalie Davis said the move not only recognised team members’ contributions throughout the Covid-19 lockdown period, but also the role they would play as the company recovered from the pandemic.
“This has been a big year for our teams, and we are very proud of the way they have served New Zealand,” she said.
“We’ve taken some time to think about the future of our business and the role we play in New Zealand’s recovery and success, and we want our team to have a stake in this too.
“Our business has achieved amazing things in the last year — reducing our emissions, phasing out tonnes of single use plastic, providing safe environments and affordable food for our customers. But none of those achievements would be possible without our team.”
Woolworths Group shares, listed on the Australian stock exchange (ASX), is valued at NZ$38.01 as of today.
Staff who already receive incentives as part of their employment with Countdown, people on short-term or casual contracts and those employed after March 1 aren’t eligible.
In March, Countdown said it was hiring new staff to meet the surge in lockdown demand.
A Countdown spokesperson said Countdown had 2100 people on casual or short-term contracts in New Zealand. The spokesperson said the company hired about 2500 people in the last few months, but that some were on permanent contracts.
The spokesperson also confirmed to 1 NEWS staff would receive dividends and have voting rights.
“The share grant recognises that our team is a vital part of our future, and gives our permanent team a stake in that.”
The spokesperson said staff on short-term or casual contracts, excluded from the criteria to receive shares, had received a 10 per cent bonus last month.
FIRST Union secretary for retail, finance and commerce Tali Williams said the move caught many employees by surprise, with many of them finding out about the scheme through the news.
“By and large, people feel this is a positive move.”
Ms Williams said while the gesture was appreciated and employees generally felt it was a “pleasant surprise”, shares couldn’t deliver people the same certainty as a pay rise could have.
“Shares don’t pay the rent. People need money now,” she said.
“People would have really appreciated a wage increase at this time.”
However, Ms Williams said she was hoping Countdown would change their minds about giving people hired after March 1 shares too, just like how it reinstated paying employees a 10 per cent bonus if they worked over the Alert Level 4 lockdown.
She said clarity was also needed so people could understand what owning the shares actually meant for them and its conditions. She said that could mean an education component needed to be attached to the scheme.
“A lot of us don’t really understand shares.”
Ms Williams also said she wasn’t aware the shares came with voting rights until 1 NEWS had mentioned it.
“But that’s something that would carry real meaning for people,” she said.
Infometrics senior economist Brad Olsen said Woolworth’s offering could be “something that a lot of companies may start to do … as we go through these tough times”.
He said giving staff shares could be a new form of incentive to keep employees connected to a company as businesses emerge from the Covid-19 pandemic.
“It gives them a vested interest in the business,” he said.
Mr Olsen said he suspected offering shares would be cheaper for Woolworths than a cash payment, while providing the extra benefits of incentivising employees.
He said it could deliver benefits for staff in the long-term, such as through dividend payments or via an increase in the share’s value over the long-term.
“Part of [Woolworth’s] thinking around the programme could be that people are not selling off all in one go,” he said, because of trading and processing fees on the ASX.
In the short-term, he said employees could be affected by currency fluctuations between the Australian and New Zealand dollars as well as movement in the Australian market.
“But the NZX and ASX are starting to improve from the gnarly figures from March and April.”
Mr Olsen said if the shares came with voting rights, they probably wouldn’t be enough to form a majority voting bloc.
However, he said it still allowed employees “to a degree, direct where the company will go”.
Countdown employs 20,373 Kiwis across its supermarkets, distribution centres, processing plants and support offices.
In March, the company announced it would be paying staff that had been employed for a year or more the living wage of $21.15 an hour from September.