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1. The paradigm shift in European employee
share ownership is becoming increasingly apparent.
In terms of dynamics, large companies are
giving way to SMEs. In this case, employees
do not share "a small piece of the cake",
they acquire the biggest piece – in most cases,
the whole cake. The context and objective
are not so much to share profits as to meet
the need for business transfers. Great Britain
is becoming Europe's number one, while the
continent, and France in particular, are fading
into the background.
2. The paradox is deepening when it comes
to employee share ownership in large European
companies. Everything indicates that companies
want it. Everything indicates that employees
want it too. Companies are increasing the
number of employee share plans. Yet overall,
the number of employee shareholders is falling,
employee ownership stake is stagnating, and
the democratisation of employee share ownership
is crumbling. As a result, the plans are becoming
less and less effective. The plans and policies
behind them are becoming increasingly undemocratic.
3. Why is employee share ownership taking
a hit in Europe's large companies? The main
reason is political. It is about the inability
of European legislators to produce legislation
in line with the development of large companies.
Today,
only 35% of the employees of large European
companies are still based in their home country
(Graph 79 page 144). As a result, only
a small minority of them are able to benefit
from the tax incentives for employee share
ownership set out in national legislation.
Employee share ownership policies, for example,
have lost 30% of their effectiveness in just
a few years because they remained national
in scope.
When it comes to employee share ownership,
as with so many other issues, Europe is sick
of its political divisions and localised thinking.
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European legislators continue to rely on outdated
frameworks and mechanisms. This explains why
recent legislative efforts in several countries
have had no significant impact on employee
share ownership in large companies. France's
Loi Pacte is the ultimate example of this
impotence.
4. A strong employee ownership movement
is now taking hold in European SMEs, starting
in Great Britain. In this country, employee
buy-outs are now the most common form of transfer
for SMEs, after family transmission. We are
rapidly moving towards a situation where one
in ten SMEs will be employee-owned. With 600
SME transfers to employees in 2024, Great
Britain created 50,000 new employee owners
in just one year, as many as all the workers
cooperatives in France (SCOPs) over an entire
century.
For employee share ownership worldwide,
this marks a true revolution. In fact,
for almost two hundred years, numerous frameworks
and models have been tried and tested to develop
employee ownership in SMEs. Today, for the
first time in the world, we have succeeded
in setting up a model that outperforms all
others. Since 1974, the world's best-known
model had been the ESOP plan in the United
States. The Employee Ownership Trust
formula introduced in the UK in 2014 now appears
to be by far the most effective.
The reasons behind its success are well understood:
well-designed legislation based on trust mechanisms.
This is what ensures its three advantages
of simplicity, ease and adaptability, in a
way that no other model has been able to achieve.
As a result, the UK is the only European country
(along with Norway) where the number of employee
shareholders has increased over the last twelve
years.
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Employee
share ownership in Europe in 2024