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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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