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EFES NEWSLETTER - JANUARY 2024
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Impact
of employee share ownership on bank risk
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A
team of researchers from the Universities of Limoges
and Bourgogne Franche-Comté in France (Professors Laetitia
Lepetit, Phan Huy Hieu Tran and Thu Ha Tran) has just
published its results.
To examine the impact of both executive and non-executive
employee ownership on bank risk, as well as to explore
the different underlying channels, they used information
in the European Federation of Employee Share Ownership
(EFES) database.
Using data from 2005 to 2019, they find that both executive
and non-executive ownership are associated with lower
bank risk, depending on employee ability and incentives
to take risks.
They find that an increase in executive and non-executive
employee ownership leads to a decrease in insolvency
risk and overall bank risk.
Therefore, the results provide evidence that holding
shares incentivizes executive and non-executive bank
employees to pursue strategies that reduce risk.
The conclusion of the work is clear:
"Our results indicate that policymakers should
encourage broad-based employee ownership plans in the
banking industry."
Full
publication:
Executive
and non-executive employee ownership and bank risk:
Evidence from European banks
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Press
review
We
have a selection of 26 remarkable articles in 9 countries in
December 2023: Bulgaria,
Canada, Czechia, France, Italy, Poland, Tunisia, UK, USA.
Bulgaria:
Advocating for employee share ownership in startups.
Canada: The new federal tax exemption for employee ownership
trusts will spur retiring business owners to sell their companies
to workers.
Czechia: Here is finally the long-awaited tax reform
to facilitate employee share ownership in startups.
France: Successful new employee share plans for Vallourec,
for Veolia, for Spie, for Stellantis, for Air France-KLM.
Italy: Employee ownership is finally coming to Canada!
Successful employee share plans for Mediobanca and for Stellantis.
Poland: Solidarnosc Union calls for increasing employee
share ownership in Poland.
Tunisia: First employee share plan for Attijari Bank.
UK: Thanks to the Employee Ownership Trust scheme, every
day a new SME is transferred to employees. This month, among
others, the case of: Hudgell Solicitors, TBM Marketing Group,
Ellwood Atfield Head-hunters, Charity People Recruitment, Interact
Contact Centres, Thomas Carroll Insurances, Optagon Roofing
Supplier.
USA: The ESOP plan, how does it work? Unpacking the myths
of employee ownership. Employee ownership is more often figuring
into private equity value-creation strategies.
The full press review is available
on:
https://www.efesonline.org/PRESS
REVIEW/2023/December.htm
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A
political roadmap for employee ownership in Europe
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