The UK Employee Ownership Index boosts case for employee led mutuals
10 December 2010
Employee owned companies outperformed the FTSE All-Share in the
first nine months of 2010, according to the UK Employee Ownership
Index (EOI) published by law firm Field Fisher Waterhouse
LLP. Employee owned companies’ share prices were up 4.2%,
performing better than the FTSE All Share companies’ share prices
which went up by 3.9% over the same period.
This evidence of long term outperformance helps support the
Coalition Government’s aim of substantial long term change in how
public sector services are provided by encouraging their provision
by employee-owned mutuals.
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.
The EOI shows that over 18 years, employee owned companies have
outperformed FTSE All-Share companies each year by on average
11%. Over successive three year periods they have outperformed
by 38% and over successive five year periods by 74%.
An investment of £100 in the EOI in 1992 would at the end of
September 2010 have been worth £768 whilst the
same investment in the FTSE All-Share Index would be worth
£235.
Graeme
Nuttall, head of the Equity Incentives team at Field Fisher Waterhouse
says:
“The Coalition Government has identified employee led mutuals
and employee ownership as having a crucial role in reforming public
services and as part of forging the Big Society. The EOI helps
demonstrates that employee owned companies are well placed to take
on this responsibility. In the long term employee owned
companies prove to be more resilient than conventionally owned
companies.”
The Equity Incentives team at Field Fisher Waterhouse produces
quarterly reports on EOI performance which have been referred to on
Radio Four’s Today programme, BBC Two’s Newsnight and in Scotland
on Sunday. The team advises on employee ownership solutions for a
variety of business structures, including under the Government’s
right to provide and right to request programmes, as well as
incentive plans for UK and overseas listed and private companies
and has 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
About EOI
The UK Employee Ownership Index is
compiled by the Equity Incentives team at Field Fisher Waterhouse
and tracks the performance of UK-quoted companies that are over 10%
owned by employees (excluding main board directors) or employee
trusts. The degree of employee share ownership is determined
on the basis of best available information. The UK Employee
Ownership Index does not necessarily include all quoted companies
with a significant degree of employee ownership.
FTSE is a registered trade mark of London Stock Exchange plc and
The Financial Times Limited. All-Share is a registered trade mark
of FTSE International Limited.