ESOP COMPANIES OUTPERFORM
Employee owned companies outperformed the FTSE All-Share in 2010, according to the UK Employee Ownership Index (EOI) published by Centre member law firm Field Fisher Waterhouse LLP. Employee owned companies’ share prices were up 16.3 percent, performing better than the FTSE All Share companies’ share prices, which went up by 11.3 percent over the year. The EOI, compiled by the firm’s equity incentives team, monitors the share price performance of listed companies, comparing the performance of 4 FTSE All-Share companies with companies that are more than ten percent owned by employees. Analysis of 2010 shows that in the final quarter employee owned companies also outperformed the FTSE All-Share, with shares up 11.5 percent compared to FTSE All-Share company share prices, which were up 6.8 percent.
The EOI shows that over 18 years, employee owned companies have outperformed FTSE All-Share companies each year by, on average, 11 percent. Over successive three-year periods they have outperformed by 38 percent and over five-year periods by 74 percent. An investment of £100 in the EOI in 1992 would have been worth £860 at the end of December 2010 whilst the same investment in the FTSE All-Share Index would be worth £249.