Employee equity participation

from Wikipedia, the free encyclopedia

Under employee share ownership refers to the contractual, lasting usually employee participation in the capital of the employing company. In contrast to a profit-sharing scheme , the employee also bears the risk of loss of capital - if the capital is not subject to insolvency protection.

Employee equity investments in Germany

Diagram of companies with profit and capital participation in Germany (2005)

Employee equity investments play a role in Germany, especially in larger companies with over 500 employees. But many medium-sized companies also practice this human resource management instrument. Overall, around 2% of companies in Germany use these systems. On the other hand, 9% of companies have implemented profit-sharing models. In addition, there is a noticeable difference between the new and old federal states. East German companies use participation models to a much lesser extent than companies from the west.

Motifs

The motive dimensions of the employee equity participation are broad. The most detailed and frequently used target group in the literature comes from Guski and Schneider:

For an analysis from the perspective of human resource management, economic performance goals dominate in the design of the employee equity participation. On the one hand, it is about the motivation to perform, which is expressed in quantitative and qualitative work performance and the associated costs, and on the other hand, it is about the motivation to participate, which is expressed in absenteeism and the tendency to fluctuate.

Today these factors still play a major role. In addition, however, the aspects of recruiting and retaining employees are also gaining an ever greater role against the background of the increasing shortage of skilled workers.

Forms of participation

The choice of the form of participation depends on which goals / motives are to be achieved with the participation. In principle, the following options are available for employee participation in the company:

Design forms

Equity or debt

By participating in the company's equity , the employees, like other shareholders, participate in both the company's profits and losses. Participation in a partnership is often not advisable due to corporate and tax law regulations. Participation in an open trading company (OHG) is an often insurmountable obstacle because of the unlimited liability for corporate liabilities. A participation as a limited partner in a KG is out of the question because of its tax treatment (employee becomes a co-entrepreneur from a tax perspective). With regard to corporations, participation in a GmbH appears only conditionally suitable due to its extensive and indispensable information and disclosure rights as well as the complex formal requirements (e.g. in the case of management participation). On the other hand, the stock corporation appears to be more suitable due to the problem-free sale of the shares and its limited liability. This applies above all if the AG is listed on the stock exchange. In the case of outside capital participation, the employee has a less extensive bond with the company than in the case of equity participation. This participation is justified by a contractual participation relationship. The employee provides the company with a certain amount of money for a mostly fixed interest rate.

Equity-like investments

In cases in which, for liability and tax reasons, participation in the equity capital as a full shareholder is not possible, participation through the intermediate forms of the dormant company or profit participation rights (mezzanine capital participation) is recommended.

Direct or indirect participation

With direct participation, every single employee is involved in the company. In contrast to this, in the case of an indirect participation, this direct contractual relationship with the employing company is terminated through the interposition of an investment company. This institution bundles the participations, it forms a "pool" which forwards the collected capital in a contract to the company. This form of participation is more complex, but offers more flexibility. As a rule, indirect participation in corporate groups is considered sensible. However, it can also apply to companies that are not characterized by several sole proprietorships. The investment company usually has the legal form of a GmbH or GbR.

Large or medium-sized companies

There may be differences between small and medium-sized and large companies in terms of employee participation. These are based on the mostly more complex requirements of large companies, different legal forms and the different possibilities in relation to the capital market. A central aspect of employee participation is that the employee has an influence on the company's results in the way they do their work. It is obvious that this relationship and the motivational effect it creates is closer or more direct in smaller companies than in large companies. Sometimes medium-sized companies have reservations about employee participation if the companies are family-run. In this context, it is not uncommon for employees to take a look at the owners' income. Where this is not desired, an adaptation of the model to the existing requirements can be achieved by designing the participation model.

Fund raising

Funding options are basically conceivable:

  • Personal contributions by the employee
  • Contributions from the employer (in the case of participation models that were launched before April 1, 2009, as a rule on the basis of Section 19a EStG, then on the basis of Section 3 No. 39 EStG)
  • State benefits (e.g. capital formation benefits )

Possible sources for employees are, for example, salary and wage components, deposits from private assets, capital-forming benefits and reinvested interest, as well as distributions from existing shareholdings. In practice, personal contributions by the employee are usually combined with company benefits in order to offer the employee an incentive to participate.

If profit participation and capital participation are linked, the profit participation is withheld in whole or in part and converted into a capital participation. In the literature, this combination is referred to as labor-based capital participation or investment profit-sharing.

The 5th Capital Formation Act ( 5th VermBG ) promotes various forms of capital participation. The exceptions include B. an indirect participation right participation or a participation right participation with exclusive participation in the profit. On the basis of the 5th VermBG, employees can receive a savings allowance of 20 percent on a VL system of up to EUR 400 per year after fulfilling a blocking period of six years , if the taxable income does not exceed EUR 20,000 for single persons or EUR 40,000 for jointly assessed persons amounts.

The § 3 No. 39 EStG, which has been in force since April 1, 2009, also allows a tax and social security-free subsidy from the employer to create a capital participation of up to EUR 360 per employee and year. Forms of participation are funded according to the 5th VermBG. Use of the funding requires that all employees who have been with the company for more than a year must be involved.

5. VermBG and § 3 No. 39 EStG are often used in combination in operational practice.

Virtual employee participation

Via a contractual (so-called "virtual") agreement (often also called "Virtual Stock Option Plan", VSOP ), employees as beneficiaries can be treated as if they held a predetermined number of shares in the company ("virtual Employee participation "). Virtual employee participation is particularly common in start-ups because it is easy to implement.

As a result, the same economic result is achieved that complex stock option programs also aim to achieve. The virtual 'shares this blame legal replicas of the actual shares represent.

Instead of delivering real business shares, a virtual employee participation is aimed at a cash payment. The calculation of the specific amount of the beneficiary's entitlement then results from the difference in value between the defined base value at the time the entitlement is granted and the value of the virtual shares when the entitlement becomes due. The virtual capital participation therefore benefits the beneficiaries in the form of a capital appreciation right.

In the case of an employee participation in the aforementioned sense, it is therefore an equity participation based on the law of obligations. The membership position of the other shareholders is generally not affected, with the exception that the outflow of liquidity dilutes their property rights economically, i.e. they decrease due to the payments to be made by the company to the beneficiaries.

Web links

literature

  • Guido Birkner (Ed.): Employee participation in joint stock companies. Frankfurt am Main 2014.
  • Christopher Hahn: Virtual Employee Participation - Basics, Structure and Practical Formulation Examples. 2nd edition, Gabler Verlag Springer Fachmedien , Wiesbaden 2018.
  • Schneider, Fritz, Zander: Employee participation in profit and capital. Düsseldorf 2013.
  • Fritz (Ed.): Employee participation in medium-sized companies - An atlas of successful participation models. Düsseldorf 2008.
  • Heinrich Beyer: Involving Employees in the Company: Practical Guide. Bertelsmann Foundation, Gütersloh 1997.
  • Klaus Blettner, Franz Heitz, Dorothea Wegenaer: Employee equity participation in small and medium-sized enterprises: Research report in collaboration with the Trier Chamber of Crafts and the University of Trier. Gifhorn 1995.
  • Achim Brotzer: Employee participation in profits and capital: developments, goals and current legal problems in Germany and Austria. VDM Verlag Dr. Müller, Wiesbaden 2008.
  • Rolf Leuner: Employee participation. 2009.
  • Eckhard Voß, Peter Wilke, Klaus Maack: Involving employees in the company: models, effects, practical examples. Wiesbaden 2003.
  • Rosemarie Fiedler-Winter: Innovative employee participation: the ideal solution for business. Practical examples. Verlag Moderne Industrie, Landsberg / Lech 1998.
  • Hans Joachim Juntermanns: Employee participation from A – Z: Terms, examples, keywords. Neuwied 1991.
  • Albert Martin: Personnel as a resource, design. Rainer Hampp Verlag, Munich / Mehring 2003.
  • Bernd Mez: Efficiency of employee equity participation: an empirical study from a behavioral point of view. Wiesbaden 1991.
  • Heinz-J. Bontrup, Kai Springob: Profit and equity participation. A micro and macro economic analysis. Gabler Verlag, Wiesbaden 2002, ISBN 3-409-11784-9 .

Individual evidence

  1. Christopher Hahn: Virtual employee participation . 2nd Edition. Gabler Verlag, Wiesbaden 2018, ISBN 978-3-658-23564-2 .