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Employee share ownership in SMEs

Employee share ownership cannot be effectively developed in SMEs by applying the same schemes as for large companies. Large companies have to raise more capital, they have to multiply the number of shareholders in this view, and it makes sense to involve many employee shareholders as well. In SMEs, the need for capital is limited, shareholders are few, and most often it does not make sense to allocate shares to many employees. In SMEs, collective employee share ownership schemes are far more efficient and, worldwide, the ESOP plan adopted in 1974 in the US is by far the most efficient of all.
The United Kingdom is the only country in Europe to have introduced employee share ownership schemes for SMEs with some success (but much less than in the US). For its part, the Labour Party has also made a proposal under the label of "employee ownership", which is controversial.
On the other hand, employee share ownership in SMEs, whether individual and direct as in large companies raises the question of devices to be able to exchange shares, as can be done on a stock market. In the US, the OTC Markets Group is pushing for this.

Press review
We have a selection of 26 remarkable articles in 9 countries in October 2019: Canada, Denmark, France, Germany, Hungary, Italy, United Kingdom, USA, South Africa.
Canada: Changing tax treatment of stock options will spur compensation reforms.
Denmark: The new social democratic government will promote a dedicated employee share ownership scheme.
France: Employee share ownership in startups has to be clarified. New employee share plans for Bouygues, for Suez, for Thales, for Voltalia. Employee ownership in some SMEs, as workers cooperatives or other schemes. The end of the workers cooperative scheme for Nice Matin.
Germany: Employee share ownership schemes make companies more successful.
Italy: First employee share plan for Generali.
Hungary: Performance shares for AutoWallis managers.
UK: John Lewis in search of cost savings to break out from its cycle of declining returns.  The Labour party presents its "Inclusive Ownership Fund" proposal as similar to the John Lewis model and a way of sharing company ownership with the workers.
USA: Employee ownership a key predictor for strongest long-term gross returns of asset managers. Numerous new companies moving to employee ownership through ESOP plans. ESOPs boost household wealth. Why OTC Markets is trying to make it easier for employees to own stock in their companies.
South Africa: Successful employee share ownership plan for Click retail group, qualified as a black empowerment vehicle because the majority of its workforce is black.

The full press review is available on:

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   With best regards



Marc Mathieu
Secretary General
Avenue Voltaire 135, B-1030 Brussels
Tel: +32 (0)2 242 64 30 - Fax: +32 (0)2 791 96 00
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EFES' objective is to act as the umbrella organization of employee owners, companies and all persons, trade unions, experts, researchers, institutions looking to promote employee share ownership and participation in Europe.