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----- Original Message -----
Sent: Wednesday, April 25, 2001 10:43 PM
Subject: Share Retention by Employees
Dear Nations Group members
As an Employee Owner and Practitioner ( my
background is well documented in the COG Library) I would like to enter the
subject.
In the consultative document on Employee Share
Ownership (UK) it states that Im employees and 859 companies participate in
the Approved Profit Share Schemes (APS) and 1.25 m employees and 1,201companies participate in the Save As
You Earn Share Option Scheme (SAYE).
Like in my case there will be some employees and
companies participating in both schemes so there wil be some duplication
say 1.5m employees and 1,500 companies.
It also states that Research by Proshare in 1997
claims that the majority of employees dispose of their shares as soon as they
are able. Only around a 33% of SAYE participants hold onto their company
shares whereas in the APS Scheme the percentage is higher.
This would tend to agree with my own experiences
being the EO representative of some 300 Bus Workers for the last 12
years.
What is true is that they are all individuals with
individual ideas and individual needs. some sell all their shares as soon as
possible, some sell shares as capital is needed and some save them all for their
retirement.
Just one thing the aim (according to the document)
is to double the number of companies (not employees). this is significant
as the present companies in the schemes tend to be the big ones and I suspect
that they would only need to have about another 50% of extra employees to reach
the target.
In my experience most workers regard the SAYE
scheme as a saving scheme to cash in and if the shares have risen this
makes an extra cash bonus, whereas the APS because the shares don't have to be
purchased are looked on more of a collectable share store. Don't forget also
that the APS is usually an annual allocation and so is a sort of a rolling
collection that can mount with small amounts of shares rather than the big
lump that comes all at once at the end of the SAYE.
On of the biggest drawbacks to enlarging the number
of schemes has got to be shortage of advisors (accountants and lawyers)
who understand EO and the schemes and it will take a lot of publicity and
enlightenment to overcome this. The other thing is the opposition of the Trade
Unions to the idea and so there is little pressure from the workforce and their
representatives to introduce the new scheme.
As a closed company that operated a Regulated
Internal Share Market we always had (on the 3 occasions we ran one) at
least 5 buyers to each seller so there was a rationing of shares. Anyone leaving
the company had to sell the shares back to the EBT but these were then used to
be allocated to the new employees and so finance was never a
problem.
I also agree with the points made in Aidan
Langley's mail 23.4.01 and feel the most important point is the unfamiliarity of
the market as a whole and the lack of education (in the loosest sense of the
word) available for employees to become more enlightened about EO and this
again I put at the door of their representative i.e. Trade Unions for not taking
a more positive approach bearing in mind how many of their members are employee
shareholders.
Regards Dave
Dave Wheatcroft
01246 233438
-Tel
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