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April 6, 2020updated 30 Sep 2022 9:08am

Mail and Metro staff offered shares in DMGT in exchange for wage cuts to avoid furlough

By Freddy Mayhew

The owner of the Mail and Metro titles has offered staff shares in the company to compensate them for taking a pay cut during the ongoing coronavirus (Covid-19) crisis.

Writing to DMG Media staff today, Lord Rothermere (pictured) said senior management had “striven hard” to come up with a plan that would avoid furloughing staff and making redundancies.

“Our guiding principles have been to protect jobs and to create a system which means that we are all contributing, in a fair way, towards the company’s long-term health,” he said.

Staff who earn more than £40,000 a year at the publisher are being asked to take a pay cut of between 1 per cent, for the lowest earners, and 26 per cent, for the highest earners.

Those who agree will be offered a monthly grant of shares in DMG Media parent company DMGT to the same value as their pay sacrifice.

They can then sell these for cash at the end of the financial year, when they will take possession of all of the shares they have accrued, or keep them as an investment.

The share price offered will the market price on the day that the shares are issued, it is understood.

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Should the share price be lower than when the shares were awarded when staff come to sell at a later date, the company said it will compensate them so they “will not have lost a penny”.

Staff can also voluntarily swap a greater proportion of their salary for shares, including those earning less than £40,000 a year (or equivalent in Euros, or US or Aussie dollars).

Shares in DMGT are currently trading at £6.55 per share, up from a two-year low of £5.57 on 17 March as the UK went into lockdown to try to slow the spread of the virus.

Rothermere told staff: “These [shares] will give you a tangible stake in the success of DMGT, while also ensuring that you are not adversely affected over the long term.

“Indeed, you may benefit if the share price increases between now and when your shares are eligible to be sold.”

Rothermere said DMGT had seen “a significant decrease in advertising revenue”, while official restrictions on free movement had “caused a serious drop in circulation”.

“Prior to this crisis, our readership numbers, circulation and advertising revenue were all significantly exceeding our expectations and I have no doubt that in due course we will bounce back stronger than ever,” he said.

“That is not to say the world is going to look exactly the same as the one we knew just a few short weeks ago. But as well as challenges it will present new opportunities.”

He said the group intended to use the months ahead to “work hard on ideas for new products and new ways to monetise them to ensure that we emerge fit for a new era”.

“Our company is one of the strongest media brands in the world and strong brands that survive difficult times always end up stronger,” he added.

The letter was co-signed by the editors of the Daily Mail, Mail on Sunday, Mail Online and Metro.

Read all Press Gazette’s coverage of the coronavirus pandemic and the news industry here

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