Employee owned companies shares outperform FTSE All-Share in first quarter of 2009
26 May 2009
Employee owned companies outperformed the FTSE All-Share in the
first quarter of 2009 according to the UK Employee Ownership Index
(EOI) published by law firm, Field Fisher Waterhouse LLP.
Employee owned companies’ share prices were down 2.4%, performing
significantly better than the FTSE All Share companies’ share
prices which were down 10.2% in the quarter.
The EOI, compiled by the firm’s Equity Incentives team, 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.
In the last quarter of 2008, employee owned companies
underperformed, however, in the long term employee owned companies
continue to outperform FTSE All-Share companies.
The EOI started in 1992 and shows that over 17 years, employee
owned companies have outperformed FTSE All-Share companies each
year by on average 10%. Over successive three year periods
they have outperformed by 41% and over successive five year periods
by 78%.
An investment of £100 in the EOI in 1992 would at the end of
March 2009 have been worth £442 while the same investment in the
FTSE All-Share Index would be worth £161.
Possible reasons for the improved performance of employee owned
companies include higher employee engagement, higher standards of
governance and conservatism in relation to growth strategies.
Graeme Nuttall, head of the Equity Incentives team at Field Fisher Waterhouse
says:
“The EOI shows that in the last quarter, employee owned
companies performed better than the FTSE All-Share – a trend that
becomes more pronounced when we look at performance over longer
periods of time. Although we see variations in relative performance
from quarter to quarter, the EOI demonstrates that in the
long term employee owned companies do better, proving to be more
resilient than FTSE All-Share companies.”
The Equity Incentives team at Field Fisher Waterhouse produces
quarterly reports on EOI performance and advises on employee
ownership solutions for a variety of business structures as well as
in incentive plans for UK and overseas listed and private
companies. They have had detailed and broad ranging input into
Government share plans policy.
For further press information please
contact:
Louise Eckersley, PR Manager,
Field Fisher Waterhouse LLP on +44 (0)20 7861 4120.