Brains at GEC spurn pounds 25,000

AROUND 25,000 of Britain's most highly trained and educated workers have turned from fat cats to thick cats by failing to sign up for a share option scheme that last week paid out the equivalent of pounds 500m.

Any UK-based employee of GEC, the electronics giant, working more than 25 hours a week could have joined the group's executive share option scheme, launched in 1997. Although 45,000 people were eligible, less than half signed up. Indeed, the scheme only has 20,000 members.

The scheme is being wound up, following the deal to sell GEC's defence businesses to BAe Systems and refocus the rest in a slimmed down group called Marconi. Staff will be able to cash in their options or to reinvest them in the new Marconi options plan. Insiders at Marconi predict the majority will take the money, so taking advantage of the phenomenal rise in the company's shares over the past two years.

Marconi shares closed the week at 1,014.5p, having more than trebled during the two years that the latest scheme has been in place. The GEC share schemes cover 70.1 million shares - 2.6 per cent of the company's equity. Though the company would not reveal the value of the schemes, City experts estimate they are currently worth pounds 500m in profits to members.

This means that the 25,000 staff who did not sign up will miss out on windfalls of around pounds 25,000 each. "I can't understand how anybody can have failed to sign up," one former GEC executive said. "There were poster adverts all around the offices and it was clear you were going to make money."

Under chief executive Lord Simpson of Dunkeld and finance director John Mayo, GEC has been completely reshaped from the slumbering beast they inherited from Lord Weinstock. Earlier this year, they struck a long expected deal with British Aerospace that transferred around half of GEC's businesses to BAe creating a new company, BAe Systems.

Nearly half of GEC's employees have transferred to BAe Systems after the reconstruction. The deal was completed last Monday, at which point the share schemes were officially wound up. Current and former GEC employees have six months to decide whether to cash in or hold on to Marconi shares.

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