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Kellogg Fellows on European and US employee financial participation

May 28, 2024

New Report on employee financial participation in Europe and the United States

Kellogg College Visiting Fellows Professor Joseph Blasi and Graeme Nuttall OBE have worked with editors Professor Jens Lowitzsch, Professor Iraj Hashi MBE and Jasper Lüke and a network of experts to produce a comprehensive report on the scope and impact of employee financial participation (EFP) in Europe and the United States.

The report examines cash and share-based EFP. ‘Benchmarking Employee Participation in Profits and Enterprise Results (PEPPER) in the European Union, the United Kingdom and the United States’ (the PEPPER V report) updates and expands on previous PEPPER reports, the first of which was published in 1991. With a Foreword by Nicolas Schmit, European Commissioner for Jobs and Social Rights, the PEPPER V report provides a basis on which to develop new policies for the promotion of EFP both at the European Union and a national level.

Essay on ‘EFP and the Rising Concentration of Capital Ownership and Capital Income’

Joseph Blasi, Distinguished Professor, Institute for the Study of Employee Ownership and Profit Sharing at Rutgers University School of Management and Labor Relations and his colleague Douglas Kruse contributed an essay on the increased relevance of EFP for the working middle class. Against a background of all available data indicating both wealth and capital income are increasingly concentrated at the top in the European Union and the United States. The essay presents a society-wide measure of the impact of EFP on the United States. The positive percentage impact of EFP was found to be remarkably similar in each income group. This egalitarian finding underpins a call to policy makers to use EFP to narrow income and wealth gaps.

United Kingdom country report

Graeme Nuttall, jointly with Jens Lowitzsch, has updated and expanded the country report for the United Kingdom since 2014. As well as updating statistics and reporting changes in law, the revised country report covers the growth of the United Kingdom’s employee ownership sector, because of the employee ownership trust (EOT) model, and the continuing success of the enterprise management incentives (EMI) arrangement.  EMI accounted for the 88% overall increase since 2009/2010 (to 2020/2021) in the number of United Kingdom tax-advantaged share plans.

Essay on ‘Towards a European Employee Stock Ownership Plan (European ESOP)’

Graeme Nuttall contributed with Jens Lowitzsch, John D. Menke, Denis Suarsana, Tej Gonza and Thibault Mirabel to an essay on standardising employee share ownership plans in Europe, especially as a business succession solution.  Learning from the success of the United States employee stock ownership plan and the United Kingdom’s EOT, and other models such as the “Slovenian ESOP”, the essay proposes the use of a trust or foundation as a buy-out vehicle and identifies what rules would be needed for employee share awards under a standardised model.

The PEPPER V report

Read the full PEPPER V report here. The PEPPER V report was prepared by the consortium of the Kelso Institute Europe at Berlin and Stiftung Europa-Universität Viadrina Frankfurt (Oder).

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