by new research from Loughborough University
London: 20 September 2012
Loughborough University today published the results of a major study into the impact of all-employee share ownership plans.
More than 2 million employees are currently participating in such HMRC approved employee share plans.
The research finds that employee share ownership can improve employee motivation and commitment and that employees who save and invest in a share plan are more likely to consider the cost implications of their actions; make recommendations to improve the business; produce better work and stay with their employer longer.
The research, conducted on behalf of ifs ProShare, PricewaterhouseCoopers and BT, also revealed that nearly 60 per cent of employees felt that participating in a share plan had given them a greater level of knowledge and understanding of how to manage their money.
Some key findings are:
• 75 per cent of employees who engaged with their share plan were more motivated and committed to their employer
• 71 per cent of Save As You Earn (SAYE) participants were more likely to consider the cost implications of their actions
• 66 per cent of SAYE participants were more likely to produce better quality work
• 50 per cent of employees said participation in all-employee share plan would ensure they remained with their current employer for longer than they otherwise would (only 32% said it would have no impact)
These results are particularly interesting, given that data was obtained and surveys conducted between 2008 and 2010 when share price performance was highly volatile.
John Collison, Head of Employee Share Ownership at ifs ProShare said:
“This detailed research provides further evidence that employee share plans can deliver very positive outcomes for employees and employers alike – even during financially challenging times.
The benefits to the wider economy are significant and we hope policymakers therefore take note of the findings, especially as the Chancellor is currently reviewing HMRC approved share plans.”
Carol Dempsey, Tax Partner at PwC said:
"Employee share plans increase engagement and motivation and contribute to company success. We urge the government to take this research on board and follow through recent initiatives to the operation of share plans and make it easier for all employees to participate. Greater employee share ownership could help improve productivity and drive UK economic growth."
And Xavier Rolet, Chief Executive, London Stock Exchange Group added:
“London Stock Exchange has always supported the concept of share ownership for employees in companies of all sizes. As a result we are pleased to see such valuable research from Loughborough University exploring the positive effects that participation in employee share plans can have.”
“Staff retention, commitment and performance can all be impacted by equity ownership and this research highlights that many employees would not have bought shares if they were not given the opportunity to participate in an
employee share plan. Equity participation is vital for a successful and thriving economy, helping promote entrepreneurship, business growth and ultimately job creation.”
Notes to editors:
The study took quantitative data from 1,500 participants in an HMRC approved share plan at numerous companies in various sectors of the economy. It also includes over 50 hours of one-to-one interviews.
This research was commissioned by BT, PwC and ifs ProShare.
ifs ProShare was established in 1992 by the Government, London Stock Exchange and a number of FTSE 100 companies to promote Employee Share Ownership.
Dated: 20 September 2012
If you or your clients would like to learn more about how employee share ownership can impact positively on your company’s performance, please contact:
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Note for Editors:
POSTLETHWAITE is a law firm which provides specialist advice on employee share schemes, employee share ownership and majority employee ownership, including EMI share options, approved options, long term incentive plans, Share Incentive Plans (SIPs), ownership by employee trusts and a wide variety of other share schemes. We look after clients from all parts of the UK, with a particular focus on smaller listed and private companies.
For further information concerning employee ownership and employee share incentives, please contact Robert Postlethwaite on 020 7470 8805 11-15 Betterton Street London WC2H 9BP
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