Employee share ownership and profit-sharing in the European Union: incidence, company characteristics, and union representation

Abstract

This article examines the incidence of financial participation across the European Union at the end of the 1990s. The main findings are that the incidence of both profit-sharing and share ownership differ considerably across member states and that this correlates broadly with the extent of differences in legislative and fiscal support for them. Other factors, such as domestic ownership, stock market listing, size (in the case of share ownership) and workforce composition, are also important. On the whole clear or strong relationships between union density and financial participation were not identified. ❖❖❖ F Sommaire Cet article donne un aperçu général de la participation financière à travers l'Union européenne à la fin des années 90. Il en résulte principalement que l'impact de la participation aux bénéfices et au capital diffère considérablement d'un Etat membre à l'autre et que ce constat correspond largement à l'ampleur des différences relatives aux mesures incitatives sur le plan législatif et fiscal. D'autres facteurs, tels que la possession de capitaux nationaux privée, le cours des marchés, la taille (dans le cas de la prise de participation au capital) et la composition de la main-d'oeuvre, sont également importants. Dans l'ensemble, une corrélation claire et nette entre la densité syndicale et la participation financière n'a pas été identifiée. ❖❖❖ D ZusammenfassungIn diesem Beitrag wird die Inzidenz finanzieller Beteiligung in der gesamten Europä-ischen Union am Ende der neunziger Jahre untersucht. Als wesentliche Feststellung geht hervor, dass es bei der Verbreitung von Gewinnbeteiligung wie Kapitalbeteiligung große Unterschiede zwischen den einzelnen Mitgliedstaaten gibt, und dass dies weitgehend

Performance and reward practices of multinational corporations operating in Australia

“…We find that there is greater likelihood of more extensive use of these practices (i.e., especially performance appraisal, 360 feedback and profit sharing) where there is low union recognition for the purpose of collective bargaining for the LOG. Our findings support the literature that suggests that unions often oppose these schemes (Pendleton et al, 2002;Taylor, 2012). In contrast, we find greater likelihood of the use of PM and reward for managers, particularly FD and share options, when MNCs recognise unions.…”

“…Discussing reward systems motivated by similar goals, such as commitment, 'belonging' and retention (Pendleton et al, 2002), scholars have noted an aligned growth in the use and importance of employee financial participation as a form of reward (e.g., share ownership, share options and profit sharing) (Poutsma et al, 2012). Poutsma et al (2012Poutsma et al ( : 1513 explain 'financial participation has emerged as a normal attribute of the employment relationship in important corners of the world'.…”

Incentives, Monitoring, and Employee Stock Ownership Plans: New Evidence and Interpretations

“…One, the empirical evidence indicates that equity‐based plans are concentrated among large firms, where the contribution of individual employees to output will typically is small and/or indirect (Kruse 1996; Pendleton 1997; Gregg and Machin 1988; Pendleton et al 2001). Two, the concentration of schemes among listed firms (see Pendleton 1997; Pendleton et al 2001) means that the value of the reward will also be a function of exogenous influences, such as investor sentiment and stock price volatility. Three, there is usually a considerable time lag between award of the stock and full acquisition of the benefit, either because of vesting periods (stock options) or deferral periods (stock purchase and stock award programs).…”

“…Lazear (2004) and Oyer (2004) have argued recently that the free‐rider problem fundamentally weakens the incentive effects of collective remuneration, except in the very smallest firms (see also Prendergast 1999). Yet the near unanimous empirical finding from the research literature is that all‐employee stock plans are predominantly found in larger firms, where incentive effects are likely to be weakest (Gregg and Machin 1988; Kruse 1996; Pendleton 1997; Pendleton et al 2001). Admittedly, the 1/n problem is widely recognized in the financial participation literature.…”

Gaining legitimacy in large Australian listed companies: exploring the role of corporate reporting regarding employees

“…Young and M. Marais study (Lenne et al 2006) of 513 2001 annual reports of ASX companies, reporting of ESOP's overwhelmingly emphasised their use to 'align' employer/employee interests. The use of share ownership schemes is contended as a way of retaining talent and motivating employees with Pendleton et al (2002as cited in Gospel & Pendleton 2005 arguing that the use of company stock has provided an alternative instrument for securing commitment of employees.…”