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 Employee share ownership, what is it?

Employee share ownership, what is it? Employee share ownership is when employees hold a stake in the capital of the company that employs them. It starts with one employee holding one share and can extend up to 100% held by all employees.

A small number of model employee share ownership plans exist around the world (but with many variations depending on the specific legislation of each country). These plans are more or less adapted to startups (or micro-enterprises) or to SMEs or large companies.

Like corporate ownership in general, employee share ownership plans can be divided into two main categories, individual direct and collective indirect share ownership:

Direct individual employee share ownership is the most traditional and familiar form.. To achieve this, the employee uses part of his or her savings or financial resources to buy shares in the company, thus assuming a personal risk. This is possible under various types of plans. This category of employee share ownership plans is virtually the only one of its kind in continental Europe.

Indirect collective employee ownership is very little practised in Europe (except in the UK). This explains why employee share ownership in Europe is almost non-existent in SMEs, and why it is almost unknown outside large companies. Indeed, SMEs generally avoid increasing their shareholder numbers, whether or not they are employees. They are only forced into it when they become larger.

On the other hand, one particular phase may trigger a desire for new shareholders: Business transmission. That is why this is the best time to introduce employee ownership in SMEs. Indirect collective ownership is the most suitable form for transferring a company to employees. Plans within this category (ESOP, EOT) have been designed for this purpose. They allow employees to acquire ownership of their company, often 100%, without having to use up their savings or personal finances, and therefore without personal risk.

Indirect collective employee ownership plans (ESOPs, EOTs) facilitate the transfer of companies to employees, which direct individual share ownership schemes can only achieve with great difficulty and expense, as employee savings are usually not up to the task.

More information    

Press review
We have a selection of 18 remarkable articles in 5 countries in August 2022: Czech Republic, France, Italy, UK, USA.
Czech Republic: Legislation to promote employee share ownership in the Czech Republic? The debate has begun.
France: Samse Group is an emblematic company for employee share ownership in France. First international employee share plan for Rémy-Cointreau. New employee share plans for Axa, for Elis. Transmission failed for the 90 employees of Acropole.
Italy: Employee share ownership in Italy: different cases and multiple opportunities.
UK: Every day a new SME is transferred to employees. This month, among others, the cases of: Concepto Diagnostics, BCMS, Minehead Medical Centre, Getech, Turnaround Publisher Services. The Welsh Government is committed to doubling the number of employee-owned businesses by 2026.
USA: In their new book, "Ownership: Reinventing Companies, Capitalism, and Who Owns What", Corey Rosen and John Case make the argument that capitalism is broken. Wealth has concentrated while wealth insecurity has soared. Public companies are focused almost solely on the short term, while private equity firms focus on buying and flipping firms in just a few years. Yet there is another model that eliminates that problems entirely: Employee ownership.
A recent study finds that workers at private companies owned by employee stock ownership plans place a higher priority on their company's commitment to corporate social responsibility than employees at non-ESOP companies. Business transfers in the form of ESOP plans for Mower Agency and for A to Z Machine.

The full press review is available on:


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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.