The Swedish Model-Employee Share Ownership. What We Can Learn From Sweden

Content Team May 31, 2019 mins read

About the team

Global Shares’ Content Team comprises a dynamic and talented team of writers and experienced professionals who strive to deliver useful equity insights and simplify complex equity information, all with the aim of helping you to better understand equity management.

The Swedish Model-Employee Share Ownership. What We Can Learn From Sweden

Employee Share Ownership Plans are engrained within the American start-up culture.

These companies have effectively underwritten their ability to access the best and the brightest labour talent within a very competitive market.

The traditional rationale for financial participation schemes is that they align worker and employer objectives in maximising output. In Europe, employee ownership levels vary much more than in the US.

European employees are often disadvantaged, primarily as share options tend to be executively biased, and because European entrepreneurs haven’t known how to allocate share options across their teams.

More importantly, the issue of disparate tax rates, geographically mobile employees, and governmental attitudes to how ESOP’s are viewed and taxed, create perplexity that both employees and employers can find difficult to navigate.

When we look at the Employee Stock Ownership in Europe, Sweden lives in a warm glow of engaged employees and higher employee retention. By following the American model, Sweden lives outside of the chilling labour market that a lot of European businesses find themselves operating in.

According to the results of the European Company Survey, 11% of Swedish private-sector companies offer their employees share ownership schemes. This puts Sweden well over the European average of just over five per cent.

The Annual Economic Survey of Employee Ownership in European Countries shows that 43% of the largest Swedish corporations offer comprehensive share ownership schemes covering the whole workforce.

Whilst it would be outlandish to suggest that ESOPs are the main reason behind Sweden’s status as the engine of the Scandinavian powerhouse, it would be even more foolhardy to suggest that ESOPs haven’t played a fundamental role in how Swedish companies are run and managed.

At Global Shares, we have worked with and continue to help some of Sweden’s largest companies administer their Employee Share Plans.

We understand the problems that companies face, but also understand how to harness the power of your employees as a key asset to your business.

What we can learn from Sweden is that a global outlook and an appetite to see how competitors operate worldwide is now an essential element in underpinning the future success of your organisation.

Learn more about how we can work together to bring you out from the cold.

Please Note: This publication contains general information only and Global Shares is not, through this article, issuing any advice, be it legal, financial, tax-related, business-related, professional or other. The Global Shares Academy is not a substitute for professional advice and should not be used as such. Global Shares does not assume any liability for reliance on the information provided herein.

Enjoy our latest posts

Food for Thought

Sign up to receive bite sized brainfood on a range of topics that will help your business grow.