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New
Record Year for Employee Share Ownership in Europe
New
record year for employee share ownership in Europe,
with nearly 400 billion Euro held by employees in
their company or 3.11%.
More
and more European companies are organizing employee
share plans. In 2018, 87.3% of all large European
companies had employee share plans of all kinds, while
52.3% had "broad-based" plans for all employees.
Their number increased by 3 to 4% on average each
year since 2006, a solid growth. The rise is back
for the number of employee shareholders, with 7.5
million people in large European companies; if we
add one million employee shareholders in SMEs, the
total figure reaches 8.5 million.
However,
the decline in the democratization rate of employee
share ownership has still to be stopped.
Following
the crisis, some European countries (including the
UK) had chosen for stronger incentive policies, promoting
employee share ownership and long term savings as
an investment for the future. Instead of that, some
other countries (including France) had chosen to reduce
public spending and to support household consumption,
while incentives for long term savings and for employee
share ownership were sacrificed.
This
had a strong impact on the democratization rate of
employee share ownership in Europe (the proportion
of employee shareholders amongst all employees), leading
to a divorce between continental Europe and the UK.
A sharp drop below 20% was observed on the continent.
On the contrary, the democratization rate had risen
to more than 25% in the UK.
After
the negative phase from 2009 to 2013, policy decisions
are positive again in most European countries. This
led to a rebound of the democratization rate to 38%
in France following the "Macron Law", illustrating
the high elasticity of employee share ownership to
fiscal incentives.
However
negative factors are still prevailing in some countries.
Germany gives the picture of the dramatic impact of
such policies on the democratization rate of employee
share ownership, with less than 13%.
On the other hand, the UK and France are the only
European countries showing a recent but significant
positive dynamics of the majority-employee-owned sector.
The number of such companies increased from 36 in
the UK in 2014 to 80 in 2018, mainly due to the impact
of the new Employee Ownership Trust scheme implemented
in 2014. In France, it is mainly due to the multiplication
of combined Management and Employee Buy-Outs.
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