Employee owned companies’ shares continue to underperform in Q3 of 2011 according to Employee Ownership Index
28 November 2011
Employee owned companies’ shares continue to
underperform in Q3 of 2011 according to Employee Ownership
Index
Employee owned companies underperformed in the
third quarter of 2011, dropping 18.2% whilst the FTSE All-Share was
down 14.3%.
The UK Employee Ownership Index (EOI) is
published by the Equity Incentives team at law firm, Field Fisher
Waterhouse LLP. It 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 started in 1992 and shows that,
despite the drop in performance seen in 2011, employee owned
companies have outperformed FTSE All-Share companies by on average
12% each year. Over successive three-year periods they have
outperformed by 37% and over successive five-year periods by
71%.
| An investment of £100 in the EOI in 1992 would at the end of
September 2011 have been worth £639 whilst the same investment in
the FTSE All-Share Index would be worth £216. |
Graeme Nuttall, head of the Equity Incentives team at Field Fisher
Waterhouse says:
“Employee owned companies did not perform as
well as the FTSE All-Share index in the third quarter of
2011. One reason for the underperformance is that the EOI is
currently heavily weighted towards niche financial services
companies and fund managers. In the year to date, the EOI is
down 25.8% compared to the FTSE down 13.3%, a relative
under-performance of 12.5% which is on a par with the EOI's other
under-performing years of 1992 and 2002. Like 2011, these
were also recession recovery years. However the index
demonstrates that in the long term employee owned companies perform
better and continue to be a successful business model."
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. It also advises on 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 information, please
contact:
Paula
Nugent, PR Executive, Field Fisher Waterhouse LLP on 020 7861
4526
Louise Eckersley, PR Manager,
Field Fisher Waterhouse LLP on 020 7861 4120
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 trademark of London Stock
Exchange plc and The Financial Times Limited. All-Share is a
registered trademark of FTSE International Limited.
Field Fisher Waterhouse
LLP
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