Employee owned companies’ shares continue to outperform FTSE All-Share companies in the long term
Companies in the UK Employee Ownership Index (EOI) continue to outperform FTSE All-Share companies over the long term by an average of 10% each year since the EOI began. Although employee owned companies underperformed in the second quarter of 2012, dropping 9.1% whilst the FTSE All-Share was down 3.7%.
The EOI is published by the Equity Incentives team at law firm, Field Fisher Waterhouse LLP. It monitors the share price performance of listed companies, comparing the performance of FTSE All-Share companies with companies that are over 10% owned by employees.
An investment of £100 in the EOI when the index began in January 1992 would at the end of June 2012 have been worth £591 whilst the same investment in the FTSE All-Share Index would only be worth £235.
"The Employee Ownership index continues to demonstrate that in the long term employee owned companies perform better and continue to be a successful business model. The Government supports employee ownership and is committed to acting on recommendations put forward in the Nuttall Review, which provides a framework to move this model into the mainstream of the economy."
Jo Swinson, Minister for Employee Ownership says:
"The Government has welcomed the excellent report by Graeme Nuttall and we will publish a full Government response to Graeme's recommendations this Autumn. We have already published a call for evidence on the right to request employee ownership. There are many great examples of employee ownership in Britain and we wish to promote this business model more widely."
For further information, please contact:
Louise Eckersley, PR Manager, Field Fisher Waterhouse LLP on 020 7861 4120
The Employee Ownership Index
The EOI tracks the performance of UK-quoted companies that are over 10% owned by employees (excluding main board directors) or employee trusts. The EOI is regularly referred to in national and regional press including The Independent, The Guardian, The Daily Mail, The Mail on Sunday, The Scotsman, Scotland on Sunday and The Yorkshire Post and has been cited in the Today Programme (BBC Radio 4) and Newsnight (BBC 2).
The degree of employee share ownership is determined using the best available information. The UK Employee Ownership Index does not necessarily include all eligible listed companies.
Equity Incentives at Fieldfisher
The UK Employee Ownership Index is compiled quarterly by the Equity Incentives team at law firm Fieldfisher. The team provides employee ownership advice and solutions for a variety of business structures, including under the Government’s right to provide and right to request programmes. It also advises on incentive plans for UK and overseas listed and private companies and has had detailed and broad ranging input into Government share plans policy.
Graeme Nuttall is a partner at European law firm Fieldfisher where he is head of the Tax Practice and leads the Equity Incentives Group. Graeme is dual qualified as a solicitor and a chartered tax adviser. He is recognised as a leading expert on employee share plans with particular expertise in employee owned businesses. On 8 February 2012 he was appointed the Government's independent adviser on employee ownership, a part-time voluntary role. The Nuttall Report was published on 4 July 2012. As a member of the HM Treasury Employee Ownership Advisory Group, he helped develop the HM Revenue and Customs approved share incentive plan and enterprise management incentives arrangement. He also drafted the Employee Share Scheme Bill, a successful Private Member’s Bill. He is legal adviser to the Employee Ownership Association, the voice of co-owned business in the UK. Graeme and others at Fieldfisher contributed to “How to become an employee owned mutual – an action checklist for the public sector” (2011) which was welcomed by Cabinet Office Minister Francis Maude and the chair of the Prime Minister’s Mutuals Taskforce, Professor Julian Le Grand, at its House of Commons launch in March 2011. Graeme has also helped develop employee ownership in other countries.
Field Fisher Waterhouse LLP
Fieldfisher is a European law firm providing commercial solutions across a range of industry sectors. The firm has a particular focus on companies that are highly regulated and those with intellectual property and technology driven business models.
The firm has over 150 partners, 240 other lawyers and nearly 300 support staff across offices in Brussels, Dusseldorf, Hamburg, Paris, London, Manchester, Munich and Palo Alto.
The main areas of practice are corporate, IP, technology and regulatory law. Fieldfisher also has leading expertise in areas such as banking and finance, financial services, real estate, dispute resolution, personal injury and medical negligence. The firm is acknowledged as leading experts in sectors such as technology and communications, hotels and leisure and media as well as for our public sector work.
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