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EFES NEWSLETTER - APRIL 2022
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JUST
RELEASED
The
new "Annual Economic Survey of Employee Share Ownership
in European Countries" is just released
More information
in
partnership with
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IN
2021
New
progression for employee shareholders in Europe last
year, with a capitalization held of 433 billion Euro
in shares in their companies, a new record figure.
Happy news for all those who can benefit from employee
share plans.
The
development of employee share ownership has continued
in large European companies in 2021. More and more of
them are organizing employee share plans. In 2021, 88%
of all large European companies had employee share plans
of all kinds, while 53% had "broad-based"
plans for all employees, and 60% had stock option plans.
Finally, 32% of all large European companies launched
new employee share plans, a proportion that tends to
increase from year to year.
However
employee share ownership is in danger within Europe.
It is becoming less and less democratic.
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The
number of employee shareholders decreased last year
and it is lower than it was ten years before; 7 million
employee shareholders are now recorded in large companies;
if we add one million in SMEs, the total number in Europe
reaches 8 million (Graph 1). The fall in the
democratization rate of employee share ownership has
been dramatic over the last ten years. And the employees'
stake in the ownership structure of large European companies
is decreasing for five years now.
In
addition, a shift has occurred between the share held
by top executive officers and that of ordinary employees,
that of democratic employee share ownership. For the
first time in European listed companies, the share held
by top executives exceeds that of ordinary employees
(Graph 2). In fact, as recently as 15 years ago,
the top executives as a whole held 1.06% compared to
1.45% for ordinary employees; today it is 1.53% for
the top executives compared to 1.48% for the others.
A
group of 10,000 top executive officers (on average four
in each company) now owns more than the 34 million employees
of large European companies. That’s more than 20 million
Euros on average for each top executive, and 30,000
for each ordinary employee shareholder.
It
should also be noted that the share held by ordinary
employees is back to the same level as fifteen years
ago. This observation sanctions Europe's failure
to promote a democratic employee share ownership policy.
Promoting democratic employee ownership is indeed a
political choice, usually supported by fiscal incentives.
Without support, the average employee cannot afford
to invest financially in his or her company. Few European
countries do this effectively.
On
the contrary, we observe that the top executives have
not lacked the resources to do so. Have public policies
to support employee share ownership, where they exist,
been poorly calibrated and misused by top executives?
We can see that this is not the case; in fact, the share
of the 1.53% resulting from the exercise of stock options
and other plans is microscopic, representing only 0.05%.
However,
where, in which countries has the share of top executives
multiplied the most over the last fifteen years, and
where has it been contained? The share of top executives
increased the most in countries where democratic share
plans are most absent. Where has the share of top executives
been contained? Where democratic employee ownership
is most significant. This is particularly the case in
France, the country with the highest share of ordinary
employees in Europe (3.50%), and the rare country where
the share of top executives has not soared, since it
is now at the same level as fifteen years ago (1.05%).
The
facts are plain to see: Democratic employee ownership
is a guarantee of balance. Its absence or weakness opens
the door to the soaring share held by top executives.
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Press
review
We
have a selection of 27 remarkable articles in 10 countries
in March 2022: Australia, Canada, Germany, Spain, France,
Ireland, Italy, Norway, UK, USA.
Australia:
A new era for employee ownership of Australian startups.
Canada: Canada needs policies that make it easier for
business owners to sell to their employees.
France: Protests at Thales. New employee share plan
for Pernod Ricard. The Congress of workers' cooperatives.
Germany: Employee share ownership works!
Ireland: JP Moragn acquires Global Shares.
Italy: Birth of the Observatory of Workers' Buyouts.
Norway: Too few employees hold shares in their company.
Spain: Telefónica and Mapfre have launched share distribution
plans for their employees.
UK: Every day a new SME is transferred to employees,
as for instance this month: Craggs Energy, Pro-Networks, Alan
Steel, Kilmac, British Rema, Esteem Training, Caley Timber.
The rise of employee-owned contractors.
USA: New business transmissions through ESOPs.
The full press review is available
on:
http://www.efesonline.org/PRESS
REVIEW/2022/March.htm
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A
political roadmap for employee ownership in Europe
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