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Financial Participation

Dissemination of employee financial participation in Belgium is in line with the European average. Regulations supporting profit-sharing and employee share ownership were introduced in 2002.

A law on employee shares has been in effect in Belgium since 1983. State support for financial participation of all employees was introduced in 1991, when the financing of participation via the issue of employee shares came into effect. The next step came in 1999, when discounts on employee shares became exempted from income tax and social security contributions as long as the shares were retained for at least 5 years. This led to the granting of share options becoming the most prevalent form of share-based participation in Belgium. It was however mainly directed at executives. Prior to 2002 there was no legal framework supporting employee financial participation in companies. Under the Verhofstadt government, a law on profit-sharing and employee share ownership was unanimously adopted by Parliament on 29 March 2001. It was based on the conviction that financial participation was desirable, as a stronger identification of employees with their companies would increase company competitiveness. The short-term goal is to have 25% of the total workforce participating in their companies.

The European Working Conditions Survey (EWCS, 2010) of employees put the incidence at approx. 8% for profit-sharing and 6% for employee share ownership in companies in Belgium with more than 250 employees.1 According to the results of the ‘European Company Survey’, a survey of more than 27,000 HR managers in Europe conducted in 2009, 15% of private-sector Belgian companies with 10 or more employees offer their employees a profit sharing scheme. Compared with other European countries, this is slightly above-average (the 30-country European average is 14%). The incidence of employee profit-sharing schemes in Belgium varies according to company size: 16% of companies with 10–49 employees, 11% with 50–199 employees, and 18% of companies with more than 200 employees have a profit-sharing scheme.2 According to the results of the ’European Company Survey’, 11% of Belgian private-sector companies offer their employees share ownership schemes. This puts Belgium well over the European average of just over 5%. The findings of the ‘Annual Economic Survey of Employee Ownership in European Countries in 2012’3 show that 32% of the largest Belgian corporations offer comprehensive share ownership schemes covering the whole workforce (European average: 53.3%).4 Share options are usual in 83% of the surveyed corporations, as compared with the European average of 64%. Also according to the results of the Cranet report 2011 financial participation models in Belgium (in companies with 100 or more employees) are substantially above the average.5 This applies in particular to share ownership models.6

Despite the extension of the statutory regulations supporting profit-sharing and share ownership schemes, the number of participation schemes has seen no major change over the past few years. Between 2001 and 2007 only four new share ownership schemes and 40 profit-sharing schemes were introduced7 .

Wilke, Maack and Partner (2014) Country reports on Financial Participation in Europe. Prepared for www.worker-participation.eu. Reports first published in 2007 and fully updated in 2014.