Developing an Ownership Culture with Employee Share Purchase Plans: Evidence From France**/Entwicklung Einer Eigentümerkultur Durch Mitarbeiteraktienpläne: Belege Aus Frankreich

Zusammenfassung

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Positive effects of employee participation on organizational performance are closely linked to the implementation of a specific corporate culture always referred to as "ownership culture". This issue can be stimulated through employee share purchase plans (ESPP). This article will investigate how to implement a successful ESPP. In order to do so, we review the literature on employees' investment decisions about their employer's shares. We present

in another section the data and methodology of the empirical study. We have conducted semi-structured interviews with French experts specialising in ESPP's implementation. We use the content analysis technique to analyse these interviews. Another section is dedicated to presenting the results of the qualitative research. We find that - offering leveraged employee ownership funds - ESPP's general characteristics, - allowing employees to transfer their deferred profit sharing and gain sharing bonuses into the ESPP - discounting

the share price, - giving employees payment facilities, - marketing expenses are particularly successful in stimulating employees' investment.

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Auszug

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Developing an Ownership Culture with Employee Share Purchase Plans: Evidence From France**/Entwicklung Einer Eigentümerkultur Durch Mitarbeiteraktienpläne: Belege Aus Frankreich

Introduction

These days, in France, employee ownership is in the limelight of companies, public authorities and employees themselves. Its development is desired and put in place through employee share purchase plans (ESPP). In this article, we investigate how to implement a successful ESPP. When proposing to its employees to buy its shares, a company can pursue several goals. In France, ESPPs often take the form of a Seasoned Equity Offering (SEO) reserved to employees. Employees are offered to buy their company stock at a discounted price. As a consequence, ESPPs are a way to raise equity and a good criterion to assess their success is the percentage of the issued equity subscribed by the employees. However, in addition to being a way of corporate financing, an ESPP is a powerful way to present a company's strategy to employees and to seek their approbation. An ESPP can also create or strengthen the corporate culture, for instance after a merger or an acquisition for instance. Shordy after Crédit Agricole and Crédit Lyonnais merged, an ESPP was offered to their employees. In such context, an ESPP can be considered as a corporate referendum whose aim is to maximise the ratio of the number of subscribers to the total number of employees. Firms use several media to convince their employees to buy their shares. Explaining corporate strategy besides the technical aspects of the ESPP is a challenging task. Having defined the two criteria of an ESPP's success (percentage of the issued equity subscribed - percentage of subscribers), we may wonder how they can be achieved.

In order to do so, we first describe the specificity of the French legal and social context in the first section. We then review the relevant literature regarding employees' investment decisions about their employer's shares. Until the 2000s, academic literature focused exclusively on how employee ownership affects employees' attitudes at work and company performance. Since then, the uncovering of several corporate scandals caused massive financial losses to employee owners. These events aroused the growing attention of the academic community who got interested in why employees invest in their company's shares. Thanks to this literature, we highlight the motivations that lead employees to participate in an ESPP in a second section. In the third section, we present the data and methodology of the empirical study. We have conducted semi-structured interviews of French experts specialised in ESPP's implementation. They are especially in charge of managing 32 French listed firms' ESPP. We use the content analysis technique to analyze the interviews. The fourth section is dedicated to presenting the results of the qualitative research. The content analysis allo...

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