EFES NEWSLETTER - SEPTEMBER 2008

Employee ownership in tough times
"Investing employee retirement money in company stock is not just risky: It's idiotic" (in American  press). Yet in present times, numerous French companies are launching new global plans (see press review)… Many American companies are bought by employees through ESOPs… German government has now just decided for a new supportive legislation in 2009… French employees didn't reduce their employee savings so much, yet President Sarkozy encouraged them to spend it and to boost consumption… The chairman of British employee-owned retailer John Lewis Partnership promises no job cuts in tough times… All idiots?

Finland – Germany - Spain
Finland brings a good example of employee ownership development in 2008. Compared to 2007, employees' share in capital raised from 1.56% to 1.89% (+21%) on average in the 61 largest Finnish companies. Due to troubles on financial markets, the market capitalisation of the 61 companies decreased from 215 to 213 billion Euro (-1%), while employees' shareholdings grew from 3.3 to 4 billions Euro (+20%). This is based on our survey of employee ownership in European companies, being now updated for year 2008. Things are not so good in Germany: Employees' share in capital appears to be unchanged in 2008 compared to 2007 (1.72%) – It is time for a better legislation. Things are even worst for Spain: Employees' share in capital decreased from 1.57% in 2007 to 1.45% in 2008.

Press review
Much new information about employee ownership in July and August 2008, with 1.113 articles in this press review (on which 366 involving stock options and 216 about workers' cooperatives). We made a selection of  50 remarkable articles in 13 countries: Belgium, France, Germany, France, India, Italy, Morocco, Namibia, Netherlands, Norway, UK, USA, Vietnam, South Africa.
France: Numerous large companies are launching new global plans. Still various options in French policy: French Government will develop employee savings, while on the other hand, President Sarkozy encourages people to spend their savings to boost private consumption.
Germany: On August 26, German Government finally decided about the new legislation for employee share ownership. A good step forward for employee ownership in Germany.
India: The Government has started the process of selling shares in an initial public offering for the largest state-owned phone company BSNL (304.000 workers). Each employee will be offered share through employee stock option plans. However, unions reject the plan.
Namibia: When it was time for the South African economy to more appropriately reflect the demographics of its population, they settled for transferring a 25 per cent stake of the economy to black people. A typical black economic empowerment (BEE) transaction allocates 40 per cent (of the 25 per cent share) to the so-called black entrepreneurs, 30 per cent to an employee share ownership scheme and 30 per cent to a broad-based ownership scheme.

The press review is available on:
              http://www.efesonline.org/PRESS REVIEW/2008/July-August.htm 

WHAT ABOUT YOU?
This is how much an employee held in 2007, on average, in shares of:
UBS  83.000 €
SocGen 49.000 €
BNP Paribas 38.000 €
Total 55.000 €
Novartis 61.000 €
Mondragon 56.000 €
CréditSuisse 84.000 €
AXA 46.000 €
Vinci 24.000 €
CréditAgricole 40.000 €

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