Reliable and up-to date information on how many German companies offer shares in their equity capital to own employees and how many employees take advantage of this option is largely lacking. Even less is known about the extent to which buying own-company shares, among other types of private saving, is subsidised based on a legal entitlement entailed in the German Vermögens-bil-dungsgesetz. In a study commissioned by the Federal Dept. of Labour, Ifo filled these gaps building on a special survey conducted at the firm-level. At the same time, the survey was supposed to collect information on what kind of provisions are being made in order to protect employees against losses in case their company goes bankrupt.
Data were collected through a two-stage representative survey carried out among private-sector firms. An auxiliary telephone survey was conducted in order to learn more about the cases of non-response. At the first stage, firms were asked to provide information regarding the existence of, and the participation in, special programmes addressing employees’ shares. At the second stage, in-depth information was collected regarding the precise nature of own-company shares (stocks, particular types of loans, etc.), the development of these programmes, the role of public subsidies, and the measures taken for the case of corporate failure. Results were weighted and aggregated based on firm-level data collected by the Federal Employment Office.
The main sources of information were three special surveys conducted by Ifo. Firms included in the survey are drawn from the Employment Office data-base. In addition, relevant results obtained from a broader panel survey run by the Institute for Employment Research, the Employment Office’s research branch, were taken into account.
6.1 % out of around 34.8 million employees in Germany, or approx. 2.1 million persons, are holding own company shares (stock data for the year of 2001). The share of employees involved is around 2 % for small enterprises and reaches 14 % for large firms. In those enterprises where own company shares were offered, on average around 60 % of the workforce are effectively holding own-company shares. During the year of 2001, around 8.6 % of all employees or nearly 3 million people were offered to acquire (additional) company shares from their employers. The opportunity was taken by around 1.5 million employees. Around 0.4 % of all employees or around 9 % of those buying assets used the option to put in a subsidised form of savings.
In spite of the importance of taking measures for the case of corporate failure, which arises from the risk characteristics of total wealth held by employees – including their human capital –, the survey reveals that only a minority of companies has made such arrangements. For no less than 96 % of the employees who used subsidised savings to buy own-company shares (instead of bonds or special loans for which making provisions of this kind is mandated) there were no measures to protect savings against the risk of insolvency.
Hofmann, Herbert and Christian Holzner, "Mitarbeiterkapitalbeteiligung - ein internationaler Vergleich", ifo Schnelldienst 55 (12), 2002, 7-13 ( Abstract / Download )
Hofmann, Herbert and Sonja Munz, "Mitarbeiterkapitalbeteiligungen und Insolvenzschutz der dafür eingesetzten vermögenswirksamen Leistungen", ifo Schnelldienst 55 (22), 2002, 15-19 ( Abstract / Download )
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