|  Home  |  What's new on this site  |  About us  |  About employee share ownership  | Links  |  News  |  What we do  |  

Employee share ownership
against the crisis

      Download Proposal
  The European ESOP model 

      Sign and react
      All reactions and supports  

An employee share ownership fund to help companies

To save companies with cashflow problems or under threat of bankruptcy from the pandemic, forms of State aid are multiplying: allowances, subsidies, loans, equity investments or even nationalisation. All are ultimately aimed at existing shareholders.

At the same cost, part or even all of this State funding could be directed to helping employees become shareholders in their businesses. Companies wishing to do so could set up an employee share ownership fund, to acquire 10%, 20% or even 100% of the shares.

The employee ownership model to be used is the ESOP model introduced in the United States as long ago as 1974. It was invented particularly for SMEs. It is still almost unknown in Europe, it is very different from what we know over here. However, it can be implemented in all European countries on the basis of existing legislation, by simply adapting it case by case in the finer points.

By so doing, the State aid will not only meet the needs of businesses for recovery but also the interests of European citizens in general. This alternative will fairly reward and motivate those whose work will save European businesses and the economy - business leaders and all employees. Vigorous employee share ownership will strengthen cooperation and joint responsibility, which are critical in the face of a global catastrophe in all areas ...

... See more

Appeal to all European
governments and institutions

      Download Appeal   
      Sign and react
      All reactions and supports  

Employee share ownership in times of pandemic

This is not the first pandemic. However, for the first time, it affects the whole world without exception. Like all previous ones, this one will come to an end, after which there will be a recovery. In the meantime, it is causing a great deal of suffering, including for industrial and financial assets, which have suffered a massive loss of value.

This situation is highly favourable to the development of employee share ownership.

Indeed, to cope effectively, everyone is inclined to join forces, to act in solidarity, to succeed together. These are also features of employee share ownership.

Many companies are suffering, encountering serious liquidity problems, and are looking to reduce salary costs, in order to cope. This can be offset by allocating shares to employees, especially as share prices have fallen. Taxation should not stand in the way of this compensation, it should encourage it. This is what the "initiative for employee participation" in Germany is aiming for (see www.mitarbeiterbeteiligung.de).

In addition, many businesses are at risk of bankruptcy. To cope, it is time to promote the other aspect  of employee share ownership, that of the takeover of  companies by employees.  There are many tried and tested formulas for this -  employee cooperatives, sociedades laborales, employee ownership trust, ESOP plans, the latter being undoubtedly the most effective.

Finally, many companies remain healthy but have to deal with the temporary loss of value of their assets and the coming requirements of the return to work. Here too the distribution of shares to employees can be a powerful factor for success for all.

In all these situations, taxation and public policy should not hinder but should encourage and facilitate.

We call on all European governments and institutions to act accordingly.

   SIGN AND REACT           Sign this appeal or add your own reaction and comments






For information and contact
Avenue Voltaire 135, B-1030 Brussels
Tel/fax: +32 (0)2 242 64 30
E-mail: efes@efesonline.org
Web site: www.efesonline.org
EFES' objective is to act as the umbrella organization of employee owners, companies and all persons, trade unions, experts, researchers, institutions looking to promote employee ownership and participation in Europe.