The purpose of the following matrix is to provide information that relates to country-specific laws and policies on employee ownership. The starting point for this matrix is the 1996-97 Pepper II Commission Report prepared by the Commission of the European Communities. This report provided information that the researchers found concerning European countries. This matrix, however, delves further by providing information across the globe. To achieve our goal, having one resource for information across the globe on state laws and policies concerning employee ownership, we need your help and assistance. Information that you can provide will be placed in the appropriate cells. We thank you in advance for your cooperation on this project.

If you would like to provide information to aid us in filling in this matrix, then we would gladly accept your contribution. To provide information, simply e-mail us. In your e-mail, please include the following information. 1. Country you are writing about. 2. How the information provided is to be entered into this matrix, i.e. tax benefit, specific law, change to an existent piece of legislation, increase in the use of a particular employee ownership scheme, etc. 3. Source of the information. 4. Please provide your name, address, phone number, and professional relation to the information provided.

We greatly appreciate your assistance in our effort to provide the community with information on employee ownership across the globe. With your aid, we will be able to complete this matrix for all countries.

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The following legend will aid you when reading the matrix:

PS: profit-sharing
SPS: share-based profit sharing
BPS: bond-based profit-sharing
CPS: cash-based profit-sharing
DPS: deferred profit-sharing
ESO: employee share-ownership
SO: stock options
DSO: discretionary share options
ESOP: employee share-ownerships plans
EBO: employee buy-outs
EXSO: executive stock option plans
BSO: broad stock options plans
PSV: privatization stock vouchers
PSG: privatization stock grants

 

Countries
Argentina Australia Austria Belarus Belgium Brazil Canada Chile China Croatia Czech Republic Denmark Egypt El Salvador Finland France Germany Greece Hungary India Ireland Italy Kazakhstan Kyrgyzstan Luxembourg Netherlands People's Republic of China Puerto Rico Poland Portugal Russia Slovak Republic Slovenia Spain Sweden United Kingdom USA Venezuela Zimbabwe
General Situation
     favorable; but skeptical, especially on ESO   unfavorable but discussed; PS and ESO prohibited due to wage freeze   government recognized that EO would enhance: new equity capital formation, debt reduction, improved business performance, human resource development, job protection, employee retirement planning and financial growth.       Republic hesitant toward EO. Privatization via citizen vouchers. No incentive via government mechanisms for employees to purchase companies no discussions Law does not recognize trusts; Employee Shareholder Association set up. Privatization efforts in place with employee ownership promoted Affirmative and discussed with social partners very favorable and discussed Favorable except for CPS--appeal to social partners no discussions ESOPS played a significant role in 150 privatizations. Laying the groundwork for employee ownership. Discussed in National Program Discussed today; appeal to social partners (1993)     Discussed; government considers initiatives: Law proposal on ESO by parties favorable and discussed     Favorable depending on circumstances Minor discussions On paper, this is the most successful country for EO Favorable Favorable Appeal to Social Partners Not discussed

Very favorable & discussed

Continuous improvements

      
Legislation:
                                                                              
specific laws and year of introduction
     Labor Law 1974 revised: 1994; Income Law 1994   ESO: (1983, 1986) SO: (1984, 1990) Preferential Share offers (1991 Act)   Employee Share Ownership Program--designed to facilitate equity investment by employees. As a general rule, discussions of this nature are defined as "labor capitalism" Social ownership is the word used to define employee ownership.     On SPS and ESO (since 1958)     Personal funds (1990)

Since 1959 on CPS and since 1967/70 on DPS, SO and;

ESO several changes

Important improvements in legislation in 1994

 Some on DPS and ESO; minor changes: 1991-1994 Some on CPS (1984) and ESO (1987) Based on US and UK models Proposed amendments would clarify tax treatments for employee ownership/stock ownership. Only for ESO, SPS & SO Some provisions in Civil Code and Workers' Statute     None In 1994 improved on CPS; BPS & SO on the basis of company saving schemes       Since 1989 privatizations law provides for ESO; PS based on 1969 law       Only general provisions in Workers' Statute & EBO (1986) Only for profit-sharing funds

SPS (1978)

SO (1980)

DSO (1984)

CPS (1987)

ESOPs(1989)

ESO (1978-)

In 1991, 1992 and 1994: easing regulation; all schemed improved in 1995: equal treatment for part-time employees

 Leveraged ESOP: employees purchase shares on credit; credit based on the company itself; loan repaid via future earnings of the company.    
tax benefits
     only for ESO   Rather limited especially for ESO and SO             Some for SPS and SO/ESO     Incentives for personnel funds; none for CPS/ESO Substantial for both firms and employees; further improved in 1994 Only for DPS&ESO, minor incentives For both firms and employees substantial     Considerable improvement in 1995 No incentives     No incentives Substantial improvements in 1994      

Incentives for firms with PS

ESO incentives for both firms and employees

       Minor, except for EBO For employees and firms on payments to the funds

Substantial for both firms and employees

In 1991, 1992, and 1994: increases in tax-relief

In 1996 withdrawal of tax-relief for DSOs

 Deduction for principle and interest payments of ESOP loans; deduction for dividend payments; deferral of capital-gains tax.    
broad ownership requirements
                                                                              
ownership tied to pension--yes or no?
                                                                              
employee voting rights
                                                                              
Diffusion of PEPPER schemes:                                                                              
prevalent types
    

Data only for large enterprises.

ESO, SO, ESOP, & PS

   ESO--CPS & DPS, including PS certificates       In large firms, employees can receive stock ownership. In village enterprises, the community and workers share broad ownership of enterprises.   Employees limited to 10% ownership of a firm.

BPS

SPS

ESO

 150 ESAs are in various stages of implementation Four state-owned electric companies privatized: employees offered 20% of shares at 80% of net asset value DPS & CPS/ESO DPS, CPS, ESO, DSO, EBO, SO-saving

ESO&DPS

PS in general

 d.n.a. 150 privatizations--employees purchase shares with payments spread over 15 years.   ESO,SPS, & SO PS & SO     CPS CPS, SO & DPS     Large companies: employees limited to maximum ownership of 20% During liquidation: employee/management can lease-buyout the company if 50.1% agree to buyout. Liquidation buyouts are the most popular; with over 1000 firms now employee owned via this method. PS & ESO 2/3 of 12,000 privatized firms employed EO. However, employees are selling their shares to outside investors. Employee can purchase shares with a 10-15% deposit with a 10-15 repayment option. Management buyouts receive no incentives nor special terms A holding company provides long-term financing. Usual conditions for share allocation: 20% to employees at no charge; 20% to citizens; 10% to national compensation fund; 40% sold to employees or other groups. CPS d.n.a. DSO, CPS, SPS, SO, ESOPs 15,000 companies have some form of EO; 7% of firms based on EO. ESOP is most common.    
# of schemes/firms involved
    

ESO: 20 schemes

SO: 1

ESOP: 2

PS: 1

   ESO: Quoted companies--CPS&DPS multinationals; financial sector; 10% of large companies (survey)     15 privatized companies are significantly employee owned.      

BPS:25(1993)

SPS:16(1993)

ESO:10(1993)

     DPS: 41 firms or group of firms (1994)

DPS: 19,000 firms & 15,780 agreements

CPS: 8,800 agreements

DSO: 200 quoted comp.

EBO: 600 from 1984-1990; 56 since 1992(est.)

SO-saving: 2,500 to 3,000

ESO&DPS: 1500-2000 firms

PS: approx. 1%, twice as much as ESO/DPS

 d.n.a.     d.n.a.

PS: 300 schemes (est.1991); Survey in 21% of companies employee incentives based on productivity

SO: quoted (privatized) companies

     CPS: 28% of companies (mainly banks) 1995

CPS: 5.2% of firms

SO: d.n.a.

DPS: d.n.a.

      

PS: d.n.a.

ESO: quoted companies

       No. of collective agreements with clauses on CPS: 1,087 (1994) d.n.a.

DSO: 4,469

CPS: 9,425

SPS: 914

SPS: 914

SO: 1,128

ESOPs: 27

Total: 15,863 schemes

      
employees involved
    

ESO: approx. 18,000

SO: 400

ESOP: approx. 340

PS: d.n.a.

   1994: 36,900 employees             d.n.a    

DPS: 90,000

DPS: 1993-5.15 million

CPS: 2.5million

ESO: 0.75 million

DSO:d.n.a.

EBO:d.n.a.

SO-saving:d.n.a.

ESO&DPS: 1.5 millions

PS: 6%

 d.n.a.     d.n.a. PS: 900,000 (est. 1991) approximately 6% of employees     d.n.a.

CPS: 11.5%

       ESO: employee shareholders: 12.4% of shareholders (1994)       Covered by these agreements: 1.8 million d.n.a.

CPS: approx. 2.5 million

SPS: approx. 1 million

SO: approx. 1 million

Total: 4.5 million

      
employee benefits or profit share/employee
    

ESO: 1-45% of capital

SO, ESOP& PS:d.n.a.

  d.n.a.     workers offered 5-10% of privatized company. Workers may borrow up to 50% of their severance pay to purchase shares.       d.n.a.    

DPS: 1994 approx. 2% of year-income to funds

CPS/ESO: 1-2% of wages

DPS: average PS 4.2% of earnings

CPS: average 2.9% of earnings

ESO&DPS: DM 20 billion

PS: 5-10% of gross earnings

 d.n.a.     d.n.a. d.n.a.     4.5-8% of net taxable profits CPS: 5.7% of average earnings       d.n.a.       d.n.a. d.n.a.

DSO: substantial

CPS: average approx. 450 pound per employee

SPS: average value at 2,700 pound per employee

      
number of employees in the country who have some form of employee ownership
                                                                             
percent of all employees in the country who have some form of employee ownership
                                                                              
number & size of major employee-owned companies
                                                                              
relationship of unions to employee ownership
                                                                         Aggregate value of US ESOP companies: $300-400 billion    
amount of pension funds where unions or participants have meaningful control over investments
                                                                              
percent of pension funds where unions or participants have meaningful control over investments
                                                                              
Change 1991-1995
     ESO: expected increase   d.n.a             decrease     DPS: increase immediately after personnel fund introduced in 1990; since then very few new

DPS: substantial increase

CPS: substantial increase

ESO&DPS: increase

PS: slight increase

 d.n.a.     expected increase

PS: unknown

SO: slight increase

     slight increase

CPS: increase in # of employees

SO & DPS: expected increase due to integration with company-saving schemes

     

PS: unknown

ESO: since 1989 increase under privatization

       slight decrease d.n.a.

DSO: no increase

CPS: enormous growth since 1991

SPS: strong increase

SO: strong increase

ESOPs: slow increase

Total: numbers doubled since

      
Changes 1995 to present                                                                              
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