#ESOaction14 Conference Summary
The conference “Taking Action: Promotion of Employee Share Ownership” on Thursday 30 Jan 2014 in Brussels gathered high level representatives of all relevant stakeholders in EU policy-making to discuss options to promote Employee Share Ownership (ESO) in Europe. In line with the Commission’s initiative as well as the European Parliament’s resolution of 15 January 2014, the following five priorities broadly shared by the participants can be summarised from the discussions:
1. Establishing a Legal Framework on ESO
We should work to create an optional legal framework at the EU level that in particular would fa-cilitate cross-border ESO schemes. An EU framework is needed to establish a level playing field that would especially create opportunities for SMEs which are most affected by the consequences of the financial crisis. SMEs should receive more policy support, in particular considering the signifi-cant unexploited potential for ESO. In this context establishing a so-called 29th regime on Employee Financial Participation (EFP) appears a promising option. Hence, it seems justified that the Pilot Project should include a preliminary impact assessment of such a regime.
2. Promoting the exchange of best practice
In order to establish a functioning exchange of best practice, systematic processing and editing of information is very important. Rather than producing “another study for the shelf”, we should look into the creation of one-stop shops. A “Virtual Centre for EFP” (as presented during the confer-ence) could be a first step in that direction.
3. Providing transparency with regard to fiscal treatment and tax incentives
Tax incentives are not a prerequisite for successful implementation of ESO, but they do effectively promote such schemes. Therefore, while harmonisation is not a condition, transparency with re-gard to the different national fiscal treatment of ESO is key. In particular, an Effective Tax Rate Cal-culator (as presented during the conference) could provide a useful decision-making tool for com-panies with cross-border activities that plan to introduce EFP schemes.
4. Combining economic and labour market policies and reducing inequality
ESO fits logically into the EU’s multi-dimensional approach of combing economic and labour mar-ket policies. ESO schemes may help to create and secure jobs, reactivate unemployed and facilitate business succession in SMEs. In order to establish equality of arms, we should develop recommen-dations at EU level for fiscal and other incentives for SMEs interested in implementing ESO schemes. In this respect, investigating and promoting the transferability of best practice ESO schemes like the Sociedades Laborales and Employee Stock Ownership Plans (ESOPs) is important.
5. Incorporating ESO into Corporate Governance and Long-Term Investment strategies
Turning workers into shareholders of their employer company helps to improve corporate govern-ance by promoting transparency, sustainability and responsibility in corporate decision-making, which is one of the main objectives of the EU’s corporate governance policy. Therefore, integrating ESO into this policy should be strongly considered. Further, as ESO can foster growth of SMEs and facilitate business succession, financing ESO schemes should become one of the objectives of the Commission’s Long-Term Investment strategy. In particular it should be considered to integrate ESO in the EIB products for SME financing and incorporate ESO into the Commission’s proposal for the regulation on European Long-Term Investment Funds (ELTIFs).
In order to achieve these aims, social partners and all other relevant stakeholders should be closely involved in the process. Further, any promotion of ESO should respect the relevant fundamental princi-ples as identified by the 1992 Commission Recommendation on EFP and reiterated in the EP Own-Initiative Report of 15 January 2014. After many years of research and fruitful discussion the time has come for concrete actions: Let’s make ESO a positive priority in Europe!
all conference materials are available for download via our Intercentar Website
conference pictures can be found on Facebook
European Parliament adopted report on Employee Financial Participation
The year is only two weeks old and Employee Ownership is already a positively discussed topic in the EU Parliament. Today (14/01/2014), the European Parliament adopted, with an amazing 562 positive to 62 negative votes, an own-initiative report 2013/2127(INI), that treats financial participation of employees in companies’ proceeds.
EFP on the EU policy agenda
Several recent EU reports have highlighted the potential benefits and advantages of employee financial participation (EFP). Over the past 30 years a large number of empirical studies have corroborated these findings. The latest round of EU cross-country studies (EWCS, CRANET, ECS) note that employees continue to expand their participation in ESO plans in Europe despite the financial crisis.
Best Practice Case Study: Voestalpine, Austria
For our 2012 EU Parliament study on Employee participation in the European Union, we published best practice case studies on both companies and countries. Here you find the full version of our best practice case study on Voestalpine, one of the worlds largest steel producers. Voestalpine became partially owned by its employees after the privatization in the year 2000. -we would be happy to hear your thoughts on this case study.
Introduction
Voestalpine AG—headquartered in Linz (Austria)—is mainly active in the production and treatment of steel. As a successful international corporate group with some 300 production and sales companies in more than 60 countries, it has nearly 40,000 employees (fewer than half of them in Austria). In conjunction with discussions about the full privatisation of the corporate group undertaken at the beginning of 2000, the group’s Board of Management together with the employee representatives developed and later implemented an employee participation scheme, which at that time was unprecedented in Austria. Through this, a large portion of the group’s workforce as well as a small group of ex-employees currently hold a 13.3 per cent stake (around 22 million shares) administrated by a private foundation (Voestalpine Mitarbeiterbeteiligung Privatstiftung).
CONFERENCE Taking Action: Debating concrete policy options to promote ESO
In the context of the European Commission Action Plan on Corporate Governance a conference will debate concrete policy options to promote Employee Share Ownership (ESO), in particular in its cross-border dimension. The full-day event will present examples of best practices from different countries. Participants will be provided with the opportunity to discuss the interim results of the EU pilot project Promotion of Employee Ownership and Participation that will be presented at this occasion.
Michel Barnier, EU Commissioner for Internal Market and Services, opens the conference which is jointly organised by DG Internal Market and Services, Europa-Universität Viadrina and Freie Universität Berlin (Inter-University Centre).
Conference
Taking Action: Promotion of Employee Share Ownership – Debating concrete policy options in the context of the EC Action Plan on Corporate Governance
When?
30.01.2014 from 8:30 to 16:30.
Where?
Albert Borschette Congress Centre, Rue Froissart 36, Brussels, Belgium
3 Employee Ownership Events on December 4th
Following up on our Kelso event announcement of November 18th, we are happy to announce two further events both taking place in Frankfurt (Oder) on December 4th.
Please confirm your attendance at kelso-professorship@europa-uni.de
11.00 am – 1.15 pm Employee Financial Participation in SMEs: A strategy for labour market policy and regional business development.
The project began in October 2012 and emphasised the support and transnational exchange of knowledge and experience in shaping the future of labour policy of- Brandenburg. In the framework of the project, players from Germany, Poland and Spain came to reciprocally learn about the different forms of employee financial participation. This knowledge and Read More…
Best Practice: Case Study on Childbase Ltd.
For our 2012 EU Parliament study on Employee participation in the European Union, we published best practice case studies on both companies and countries. Here you find the full version of our best practice case study on Childbase, a child care provider in the UK, that is implementing an ESOP with as a goal 100% Employee Ownership.
Introduction
Childbase Partnership Limited is a company with the headquarters in Newport Pagnell, UK, which operates a chain of nurseries throughout the United Kingdom, but mainly in the South of England. Originally, Sir Peter Thompson and his son Mike Thompson founded it as a small family company with four staff members and 20 children in 1989. Read More…
100th Anniversary of Kelso
On the fourth of December we celebrate the 100th anniversary of Louis O. Kelso with an international event at the European University Viadrina.
About Kelso: Louis O. Kelso (1913-1991) was a political economist in the classical tradition of Smith, Marx and Keynes. He was also a corporate and financial lawyer, author, lecturer and merchant banker who is chiefly remembered today as the inventor and pioneer of the Employee Stock Ownership Plan (ESOP), the prototype of the leveraged buy-out which Kelso invented to enable working people without savings to buy stock in their employer company and pay for it out of its future dividend yield. Source: Kelso Institute
Kelso regarded the ESOP and CSOP as pragmatic proof that his revolutionary revision of classical economic theory, and the financial techniques he derived from this new perspective, were sound and workable in the economic and business world. As a corporate and financial lawyer, and later as senior partner in the law firm he founded, Kelso well understood this world. He was further motivated by his conviction that lawyers had a special responsibility to maintain and improve society’s institutions in the light of its democratic values. He further believed that the business corporation was society’s greatest social invention and that its executives had a fiduciary responsibility to exercise its vast power.
The event will be under the auspices of the Polish Vice-Minister of Economics, Mrs Ilona Antoniszyn-Klik.
Special guests are: Patricia Kelso (Kelso Institute), John D. Menke (Menke Group), Paul Maillard (FONDACT), David Morris (Global Wealth Allocation), Daniel Dahm (United Sustainability), Herwig Roggemann (Institute for East European Studies).
The Event is jointly organized by: The Centre for Interdisciplinary Polish Studies (Prof. Dr. Dagmara Jajeśniak-Quast) and the Kelso Professorship of Comparative Law, East-European Business Law and European Legal Policy (Prof. Dr. Jens Lowitzsch)
Time & Location: Wednesday December 4th 2013 4PM: Logensaal – Logenstr. 12,15230 Frankfurt (Oder) Germany.
Week of Employee Financial Participation Trailer – EESC, Brussels
The conference “Week of Employee Financial Participation” held on 17 ‐19 October 2011 was a Read More…
