Companies that encourage employee ownership – outperform
In a recent report of results in the UK Employee Share Ownership Index ( EOI ) the 69 companies tracked in detail delivered total average returns of 53.3 % in 2013 – well above the 20.9 % average returns delivered by all 623 companies on the FTSE Index. The EOI tracks share price performance of companies where employees own more than 3 % of equity.
These results giver additional evidence to support the already overwhelming academic research which indicates improved performance , productivity and profit in businesses with an element of employee ownership.
Capital Strategies ( UK ) said that the EOI ended 2013 on an all time high and has outperformed the FTSA All-Share in all of the last six quarters.
As part of the recent Autumn statement the UK government allocated an extra $25M p.a. to support Employee Share Ownership Plans, which is in addition to the $50M as part of the March budget.