PEPPER IV REPORT

BENCHMARKING EMPLOYEE FINANCIAL PARTICIPATION IN MEMBER AND

CANDIDATE COUNTRIES OF THE EU

Iraj HashiStaffordshire University, U.K.

Brussels, 23 May 2008

Aims of the Project

• To identify different financial participation (FP) schemes practiced by companies in different countries

• To find out the extent of the availability of FP schemes across the European Union and the extent to which they are taken up in different countries

• To analyse comparable indicators of FP across EU members and candidate countries

Benchmarking

• Any benchmarking exercise requires information which is consistent and comparable across countries

• Data must be collected by similar methodologies and questions to be comparable

• Questions must have the same meaning for respondents in different countries

Sources of Data

• There is no single database showing the extent of FP in EU countries

• There are 3 major sources of information

• These sources are very different from each other and convey different information

– CRANET

– EWCS

– EFES Survey

CRANET Survey

• Postal survey of HR Managers (main aim is HR practices and not FP schemes); 7914 companies in 32 countries (response rate 16%)

• FP is only one part of a six part questionnaire; and is concerned with FP schemes offered by companies

• Missing 9 countries of our interest

• Consists of companies with 200+ employees (but 1999/2000 survey covered companies with 100+)

• Covers all schemes (broad based or limited)

EWCS• Survey of 30,000 individuals across 31 European

countries; face to face interviews; response rate 48%

• FP (in the form of ‘sources of income’ constitutes a small part of the questionnaire; not the focus

• Individuals are asked if they actually receive any profit sharing or any income from shares of the company for which they work

• Respondents are not necessarily employed• FP schemes may or may not be broad

EFES Survey

• All large companies quoted on stock markets with market value of € 200 mil + are included (2270)

• A number of companies with 100+ employees and the majority of shares owned by employees (207)

• Focuses on the proportion of company shares owned by employees (thus only on one kind of FP)

So:

• No single consistent source of information across all EU countries

• Different sources focus on different types of financial participation (potential vs actual)

• Thus the need for a survey specifically focusing on FP schemes in all 29 or 30 countries, using same questions and same methodology

Percentage of companies offering broad based employee participation schemes

broad based ESO

0.005.00

10.0015.0020.0025.0030.0035.0040.0045.00

POLAND*

BULGARIA

DENMARKCROATIA*

FRANCEGREECEBELG

IUM

NETHERLANDSUK

SWEDEN

HUNGARYCZECH FIN

LAND

SLOVENIAITALY

SLOVAKIA

AUSTRIA

GERMANY-GDR

CYPRUSESTO

NIAROMANIA*

SPAINPORTUGAL*

TURKEYLIT

HUANIA*IR

ELAND

%

ESO 2005

ESO 1999

Percentage of companies offering broad based employee participation schemes

broad based PS

0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

90.00

100.00

FRANCEFIN

LAND

GERMANY-GDR

NETHERLANDS

ROMANIA*LIT

HUANIA*AUSTR

IACROATIA*

PORTUGAL*CZECH SW

EDENPOLA

ND*SLO

VENIASPAIN

SLOVAKIA

HUNGARY

UKESTO

NIAGREECETURKEYCYPRUSDENMARK

ITALYBULG

ARIABELG

IUM

IRELA

ND

%

PS 2005

PS 1999

Percentage of employees in sample companies covered by broad based financial participation schemes

ESO-employee coverage

0.00

10.00

20.00

30.00

40.00

50.00

60.00

UKFRANCEPOLA

ND*CROATIA*

GREECE

NETHERLANDS

DENMARKPORTUGAL*

BELGIU

M FIN

LAND

BULGARIA

SWEDEN

ROMANIA*AUSTR

IASLO

VAKIACYPRUS

GERMANY-GDR

SLOVENIA

ESTONIA

TURKEYCZECH ITALY

HUNGARYLIT

HUANIA*SPAIN

IRELA

ND

%

ESO 2005

ESO 1999

Percentage of employees in sample companies covered by broad based financial participation schemes

PS-employee coverage

0.00

20.00

40.00

60.00

80.00

100.00

120.00

FRANCEFIN

LAND

GERMANY-GDR

NETHERLANDS

PORTUGAL*ROMANIA*

UKAUSTR

IACROATIA*LIT

HUANIA*SW

EDENSLO

VAKIASLO

VENIAPOLA

ND*GREECE

BULGARIA

ESTONIA

CZECH DENMARK

TURKEYBELG

IUM

SPAINHUNGARY

ITALYCYPRUSIR

ELAND

%

PS 2005

PS 1999

ESO

0.00

1.00

2.00

3.00

4.00

5.00

6.00

IRELA

NDFRANCEBELG

IUM

LUXEMBOURG

SLOVENIA

DENMARKSLO

VAKIAESTO

NIA UKBULG

ARIASW

EDENROMANIA

CZECH

NETHERLANDS

ITALYCROATIATURKEYCYPRUSAUSTR

IAHUNGARY

GREECELIT

HUANIAPORTUGALGERMANY

POLAND

FINLA

ND LA

TVIAMALT

ASPAIN

%

ESO 2005

ESO 2000

PS

0.00

5.00

10.00

15.00

20.00

25.00

30.00

SLOVAKIA

SLOVENIA

SWEDEN

NETHERLANDS

LUXEMBOURG

FRANCEFIN

LAND

CZECH ESTO

NIAIR

ELAND

LATVIA UK

DENMARKSPAIN

BULGARIA

BELGIU

M AUSTR

IAGERMANYROMANIA

POLAND

CROATIALIT

HUANIAMALT

AITALY

HUNGARYGREECECYPRUSTURKEY

PORTUGAL

%

PS 2005

PS 2000

The Actual Take-up of Financial Participation Schemes (EWCS)

ESO

0.00

1.00

2.00

3.00

4.00

5.00

6.00

AUSTRIA

BELGIU

M BULG

ARIACYPRUSCROATIA

CZECH DENMARK

ESTONIA

FINLA

ND FRANCE

GERMANYGREECE

HUNGARYIR

ELAND

ITALYLA

TVIALIT

HUANIA

LUXEMBOURG

MALTA

NETHERLANDS

POLAND

PORTUGALROMANIASLO

VAKIASLO

VENIASPAIN

SWEDEN

TURKEY UK

%

ESO 2005

ESO 2000

PS

0.00

5.00

10.00

15.00

20.00

25.00

30.00

AUSTRIA

BELGIU

M BULG

ARIACYPRUSCROATIA

CZECH DENMARK

ESTONIA

FINLA

ND FRANCE

GERMANYGREECE

HUNGARYIR

ELAND

ITALYLA

TVIALIT

HUANIA

LUXEMBOURG

MALTA

NETHERLANDS

POLAND

PORTUGALROMANIASLO

VAKIASLO

VENIASPAIN

SWEDEN

TURKEY UK

%

PS 2005

PS 2000

The Actual Take-up of Financial Participation Schemes (EWCS)

Profit sharing based on predefined formula and paid on a regular basis

0.00

5.00

10.00

15.00

20.00

25.00

30.00

AUSTRIA

BELGIU

M BULG

ARIACYPRUSCROATIA

CZECH DENMARK

ESTONIA

FINLA

ND FRANCE

GERMANYGREECE

HUNGARYIR

ELAND

ITALYLA

TVIALIT

HUANIA

LUXEMBOURG

MALTA

NETHERLANDS

POLAND

PORTUGALROMANIASLO

VAKIASLO

VENIASPAIN

SWEDEN

TURKEY UK

%

PS 2005

predefined formula

regular basis