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EFES NEWSLETTER - NOVEMBER 2019
| Employee
share ownership in SMEs
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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.
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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:
http://www.efesonline.org/PRESS
REVIEW/2019/October.htm
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A
political roadmap for employee ownership in Europe
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