April 1, 2021

The State of Employee Ownership in Europe

Executive Director

On March 31, the European Federation of Employee Share Ownership (EFES) reported on the state of employee ownership in Europe in 2020 in its annual report on employee ownership in European countries. Author Marc Mathieu notes that “the upward trend in the number of employee shareholders continues,” but also that it may be in danger in Europe as it becomes “less and less democratic.”

Employee Ownership in Public ("Listed") Companies

The number of employee-owners in large public companies continued its year-over-year increase since 2016, and 7.1 million employees are now shareholders in the 2,723 largest companies in the 32 European countries. Over the longer term, the number of employee-owners in these companies increased from 6.4 million in 2006, the first year in this series of reports, although the high point was 7.4 million in 2010/2011.

Many of these plans are opt-in, allowing employees the right to purchase shares, and the trends of employee participation are mixed.

  • The percentage of companies offering broad-based plans has increased every year, from 33% in 2006 to 53% in 2020.
  • A compelling graph (page 9) shows that the longer a company offers a plan, the greater the portion of the workforce that chooses to participate. Despite large year-to-year variation, the average increase is 1% greater participation for every year a plan is in existence, so companies with 50-year-old plans tend to have 50% participation rates.
  • The proportion of the workforce participating in plans, however, has declined from 23% in 2006 to 18.5% in 2020, which the author calls the “democratization rate.” The report notes that “This fall is mainly linked to the relocation trend of large European companies.” As large European countries now have a majority of their workforces outside their home countries, it becomes increasingly complicated to cover all employees with a harmonized stock plan. France has the highest democratization rate, followed by the UK, Malta, and Sweden.

Employee Ownership in Private Companies

Although much of the report concerns public companies, it also notes that 1 million employees in small and medium enterprises in Europe are employee-owners. Two European countries, the UK and France, have more than 100 privately held, majority employee-owned companies with 100 or more employees. Three other countries (Spain, Italy, and the Czech Republic) have 10 or more such companies (page 115).

Top-Five Lists

The top five European companies in terms of the greatest stock value held by employees (see the chart on page 47) are:

  • Roche (Switzerland, 3% of shares held by employees)
  • Adyen (Netherlands, 22% of shares held by employees)
  • Vinci (France, 12% held by employees)
  • Mondragon (Spain, 91% held by employees)
  • Total (France, 6% held by employees).

The largest companies in which a majority of shares are held by employees (page 49) are:

  • Mondragon (Spain, 82,000 employees)
  • John Lewis Partnership (UK, 81,000 employees)
  • STEF (France, 19,000 employees)
  • Manutencoop (Italy, 18,000 employees)
  • Arup Group (UK, 16,000 employees)

The European Federation of Employee Share Ownership (EFES) is an umbrella organization of employee-owners, companies, and all persons, trade unions, experts, researchers, and institutions looking to promote employee share ownership and participation in Europe.