Home > Main Blog - General > Boots thanks their staff for years of loyal service.

Boots thanks their staff for years of loyal service.

Boots is a large, mainly pharmacy chain in the United Kingdom.

It employs 75,000 people in stores throughout the United Kingdom. A great proportion of those make very little above minimum wage. Of the 75,000 employed, 15,000 are in the Final Salary Pensions Scheme.

As a result of a relatively static stock market from 2000 and various tax changes many Pension funds in the UK fell in to the red. In response, Companies closed these schemes to new employees. The pension you would get would depend heavily on the value of the stock exchange. Boots closed theirs in 2000, 20% of the workforce as it now stands remain in that final salary scheme. They were loyal employees to the Company.

Alliance Boots was bought by private equity firm Kohlberg Kravis Roberts (KKR) and Stefano Pessina, now executive chairman, for £11bn in June 2007, in the biggest ever leveraged buyout in Europe.

The first announcement of their new boss was to announce the end of the final salary scheme and complete transfer of all those long term staff to investment fund pensions. Many will have no ability to develop a decent pension in the few years they have available before retirement.

This they argue is to provide better motivate staff.

Their new boss is a former Halifax Bank of Scotland fat cat Andy Hornby. The 43-year-old lost his job after the bank’s disastrous takeover by Lloyds but had already built up a £240,000-a-year pension.

The pension fund is £188 million in surplus. Despite the recession, trading profit climbed 11.6% to £953m, as at May 2009 but a large chunk of that was absorbed by finance costs of £705m, on sales of £20 billion.

What a great thank you to staff for years of loyalty.

Categories: Main Blog - General
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