share ownership continues its slow erosion
in Europe. This is evidenced by all significant
indicators. Only three are exceptions: the
percentage of employees' ownership stake and
capital held, as well as the number of companies
with employee share plans.
The share held by employees has risen to 3.26%
and 447 billion Euro in 2022, new record figures.
Great news for those who have been able
to benefit from employee share plans!
However, top executive managers take the lion's
share (1.63% and 224 billion for 9,600 people),
while ordinary employees stall (1.63% and
223 billion for 6.8 million employees). As
a result, the imbalance between the share
held by top executive managers and that of
ordinary employees, the democratic employee
share ownership, continues to grow. In European
listed companies, the share held by executive
directors now clearly exceeds that of ordinary
employees, whereas 15 years ago executives
together held only 1.06%, compared with 1.60%
for ordinary employees. A group of 9,600 managers
(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 executive, and 33,000
for each ordinary employee shareholder. Overall,
the share held by ordinary employees is now
at the same level as it was fifteen years
An increasing number of large European companies
are setting up employee share plans. In 2022,
95% of large companies had employee share
ownership, 88% had plans of all kinds, while
57% had plans for all and 54% had stock option
Thus the past year has once again confirmed
the fact: employee share ownership is beneficial
for those who have access to it and is desired
Yet democratic employee share ownership peaked
in 2011 in large European companies and has
been steadily declining ever since. Here are
the main indicators of this deterioration:
The share held by ordinary employees is declining,
as we have seen above. The number of employee
shareholders is decreasing. This is the case
in all European countries (with the notable
exception of Great Britain). A decrease is
also apparent in the number of large companies
where employees hold a significant share.
Moreover, there has been a sharp decline in
the democratisation rate of employee share
ownership over the last ten years. This confirms
once again that employee share ownership
is in danger in Europe. It is becoming less
and less democratic.
The number of employee shareholders decreased
again last year. It is lower today than it
was ten years ago. There are currently 6.8
million employee shareholders in large companies.
If we add one million employee shareholders
in SMEs, the total number in Europe is only
7.8 million, compared to 8.3 million in 2011.
The decrease in the number of employee shareholders
affects all European countries, with the exception
of Great Britain.
has been a sharp decline in the democratisation
rate of employee share ownership over the
last ten years. This is particularly pronounced
in France. In France, employment has risen
sharply in large companies, but the number
of employee shareholders has not kept pace.
As a proportion of the number of employees,
the percentage of employee shareholders in
large French listed companies was 41.5% in
2010. It is only 32% in 2022, and just 19%
in Europe. If the rate of democratisation
could have been maintained, France would have
3.5 million employee shareholders today instead
of the 2.8 million recorded. Thus, in terms
of democratisation, France is down 25% over
Why this falling off? It is a sign that employee
share ownership plans are becoming less and
less effective. The national fiscal policies
that support them have reached their limits.
Indeed, promoting democratic employee share
ownership is a political choice, and is generally
supported by tax incentives. Without support,
the average employee cannot afford to invest
financially in their company. Few countries
do this effectively.
On the contrary, there is no lack of resources
for executive directors. Have public policies
to support employee share ownership, where
they exist, been poorly calibrated and misused
by managers? No, this is not the case. In
fact, we observe that in the 1.63% held by
top executives, the share resulting from the
exercise of stock options and other employee
share plans is microscopic, representing only
Why are employee share plans and policies
less and less effective in large companies?
Because they remain national, while the employees
of large companies are increasingly based
outside their home country. This is the well-known
phenomenon of job relocation.
Thus, the share of employees who can benefit
from the plans and policies is getting smaller
and smaller. Sixteen years ago in large European
companies, almost one out of every two employees
was still located in the home country, where
they could benefit from the political incentives
of their country. Today, this is only true
for a third of employees, the other two-thirds
working outside the home country.
Thus, overall, employee share ownership policies,
because they remained national, have lost
30% of their effectiveness in a few years.
This explains why recent legislative efforts
in several countries (Pacte Law in France,
fourfold increase of tax incentives in Germany)
have not had any significant impact on employee
share ownership in large companies.
This observation sanctions the failure
of Europe to promote a democratic employee
share ownership policy, while on the contrary
it is satisfied with the growing influence
of executive directors.