Last decade saw employee owned company shares outperform the FTSE All-Share according to Employee Ownership Index
23 February 2010
The UK Employee Ownership Index (EOI), published
by law firm Field Fisher Waterhouse LLP, shows that although
equities generally delivered poor returns over the last decade, due
to it starting at the peak of the dot-com boom, employee owned
companies performed more strongly.
Employee owned companies outperformed FTSE
All-Share companies over the last decade with shares up 0.9%
compared to the FTSE All-Share companies’ share prices which were
down 9.9%.
Analysis of 2009 shows that employee owned
companies underperformed in the final quarter, with shares down
1.1% compared to FTSE All-Share company share prices which were up
4.8%. Overall, however, they outperformed the FTSE All-Share
over the year with shares up 54.4% compared to 25%, a trend that is
also seen over the longer term.
Over the last 18 years, the EOI has beaten the
FTSE All-Share in twelve of those years with an average annual
differential of 11.2%.
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.
| An investment of £100 in the EOI in 1992 would at the end of
December 2009 have been worth £685 whilst the same
investment in the FTSE All-Share Index would be worth £224. |
Graeme Nuttall, head
of the Equity Incentives team at Field
Fisher Waterhouse says:
“By monitoring the share price performance of
employee owned companies we have seen that over the last decade, as
a group, those shares have outperformed the FTSE All-Share Index.
This sends a strong message about the long term success story
of employee ownership as a business model.”
The Equity Incentives team at Field Fisher
Waterhouse produces quarterly reports on EOI performance which are
regularly referenced by the media, most recently Radio Four’s Today
programme, BBC Two’s Newsnight and Scotland on Sunday. The team
advises on employee ownership solutions for a variety of business
structures 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.