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EFES NEWSLETTER - SEPTEMBER 2024
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Employees
can buy their company without having to pay a cent out
of their own pocket.
For 50 years, we have known the mechanism that makes
this kind of magic possible. Today marks the 50th anniversary
of the ERISA law passed in the USA in 1974. This has
enabled the mechanism known there as the ESOP (Employee
Stock Ownership Plan) to be multiplied on a large
scale.
The Menke Group itself celebrates its 50th anniversary
(see press review). Founded by John Menke in 1974, the
Menke Group is number one in the United States for consulting,
setting up and managing employee stock ownership plans
(ESOPs), which organise the transfer of companies to
employees.
After 50 years, these mechanisms have reached cruising
speed in the USA. We generally quote the figure of 10%
of company employees, or one company in ten.
Similar mechanisms are being developed elsewhere in
the world. Since June, Canada has been applying ad hoc
legislation. A new case has arisen in Australia. Examples
have been reported in Germany, Ireland and Slovenia.
Since 2014, Great Britain has made a big impact by introducing
the use of a simplified mechanism for transferring companies
to employees, by means of an Employee Ownership Trust.
Like the American ESOP plan, this is a collective employee
share ownership scheme.
Where are we after ten years? The success is spectacular.
In ten years, 1,756 companies have been transferred
to their 124,000 employees (at end of July 2024). By
2024, the number of companies passing on their know-how
to their employees will be one or two a day. In most
cases, they become 100% owners.
Even more significant is the comparison between the
number of transfers to employees and all business transfers.
Currently, the number of businesses transferred to employees
represents 6% of all business transfers in Great Britain
(see graph). At the current rate, it will not be long
before the figure of one company in ten is reached.
Several other European countries already have the legal
systems and skills to do the same, such as the Netherlands
and Sweden. Calling all enthusiasts!
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Sources: EFES Database, UK Companies House Register
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Press
review
A
selection of 48 remarkable articles in 9 countries in July-August
2024: Australia, Canada, Czechia, France, Poland, Slovenia,
UK, USA, Vietnam.
Australia: A dentist practice is the second case of
an Employee Ownership Trust in Australia.
Canada: Employee Ownership Trusts take shape: Federal
government passed new rules and incentives for EOTs in June.
Czechia: The new tax rules for employee share ownership
in the Czech Republic.
France: New employee share plans for Société Générale,
for TotalEnergies. Business rescues through workers' cooperatives
for Wehr, for Meusienne, for Duralex.
Poland: Auchan is the flagship model of employee share
ownership in Poland.
Slovenia: Slovenian government gives the green light
to the preparation of new legislation for employee ownership.
UK: Valloop Exchange platform aims to help accelerate
the transition of Small to Medium Sized Enterprise (SME) businesses
from privately owned to employee owned through innovative
use of AI. Thanks to the Employee Ownership Trust formula,
one or two new SMEs are transferred to their employees every
day. This summer, among others, the case of: Anderson Clark
Motor Repairs, Brazen Public Relations, R&W Scott Bakery,
Sevenoaks Sound & Vision, Spawforths Architectural, Gusto
Construction Group, HeartVets Cardiology, Standguide Education
& Training, Cardinal Global Logistics, Strategic Workforce
Solutions Group, Network Design & Marketing, Engage Interactive,
Graystons Medical, BI Catering Equipment, Conlon Construction,
RA Information Systems, Total Recruitment Group, McKinlay
Kidd Tour Operator.
USA: The Menke Group celebrates 50 years of advising
companies on designing and managing ESOPs. New report identifies
funds focused on investing in employee-owned companies. New
business transfers through ESOP plans.
Vietnam: Liberalization of Vietnam’s Employee Stock
Ownership Plan regulations.
The full press review is available
on:
https://www.efesonline.org/PRESS
REVIEW/2024/August.htm
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A
political roadmap for employee ownership in Europe
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