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Financial Participation

France can look back at a long tradition of employee financial participation. France is one of the leaders in the incidence of participation schemes in Europe. State support for employee financial participation is stronger than in other European countries. Companies with 50 employees or more are required by law to offer a profit-sharing scheme.

Back in 1947 the French government started drawing up proposals for collective gain-sharing linked to a company’s productivity. In spite of the continual shifts between left-wing and right-wing governments state support for employee financial participation has been in existence since the end of the 1950’s. The original objective of employee financial participation was income and wealth redistribution. The first schemes were voluntary, contained no appreciable tax incentives, and were consequently not very successful. The introduction of tax incentives led to an increase in the incidence of employee financial participation schemes. There are now a range of regulations in France governing gain-sharing and employee savings.

Two laws were adopted in 1993 and 1994 relating to state support for employee financial participation. The 1994 law consolidates the three pillars of employee financial participation in France: „intéressement des salaries“ (voluntary gain-sharing), „participation“ (compulsory deferred profit-sharing) and company savings plans for the purchase of employee shares. It was also the law’s intention to encourage companies to involve employees owning company shares in company decision-making (co-determination).1

According to the results of the “European Company Survey“, a survey of more than 27,000 HR managers in Europe conducted in 2009, 35% of private-sector French companies with 10 or more employees offer their employees a profit-sharing scheme. This puts France into 1st place in Europe (the 30-country European average is 14%). The prevalence of employee profit-sharing schemes in France increases in line with company size. 29% of companies with 10-49 employees, 64% with 50-199 employees, and 82% of companies with more than 200 employees have a profit-sharing scheme.2 By contrast, the results of the “European Company Survey“ show that just 5% of French private-sector companies offer their employees share ownership schemes. This is in line with the European average. The higher incidence of profit-sharing is attributable to the legal background. Profit-sharing is compulsory in companies with more than 50 employees.

According to the results of the fifth European Working Conditions Survey (EWCS) in 2010 France is one of the European leaders when it comes to profit-sharing schemes.3 With 22.9% the incidence of such schemes is well above the European average of around 12.5%, according to the study. With regard to the incidence of employee share ownership France at 7%, according to the EWCS, is also over the European average of around 3%.4

The results of the Cranet Report 2011 confirm the above-average incidence of profit-sharing schemes in companies with 100 employees or over in France.5 Around 79% of the companies surveyed in France declared that they have profit-sharing schemes. This is far above the average of 36% among the surveyed countries.

According to a comparative study conducted by the FAS (Fédération des Associations des Actionnaires Salariés et Anciens Salariés) on employee share programmes in the 250 companies listed in the French SBF 250 stock exchange index this form of share ownership programmes has developed relatively stably.6


Level of equity held by employees in SBF 250 companies (2011)

Share of equity held by employees

Percentage of companies

<1%

16%

1-2 %

36%

2-3 %

12%

3-5 %

12%

5-10 %

8%

>10 %

16%

Source: FAS (2011).


Percentage of employees holding shares in SBF 250 companies (2011)

Percentage of employees holding company shares

Percentage of companies

0-25 %

48%

25-50 %

24%

50-75 %

20%

45-100 %

8%

Source: FAS (2011).


According to the annual trend analysis by Aon Hewitt, in which 45 major French corporations were surveyed in 2012, employee share schemes continue to be supported by companies. A total of 46% of the surveyed companies declared that they were implementing employee share ownership schemes. In 2011 the figure was 52%. Reasons for this decline were the high costs, the scepticism of the main shareholders and the excessive risk for employees. Free shares are offered in 50% of the companies (against 14% or 26% in 2009 and 2010, respectively) and employee shares are sold in 72%. In 50% of the companies surveyed the shares held by employees represented over 3% of company capital.7

In 2012 there were 12,165 (Sociétés cooperatives de production) in France. These are cooperatives in which staff hold the majority of shares. In these cooperatives it is usual practice for employees to elect their management or to themselves manage the company, to be involved in important decisions and to participate in any profit earned. French company law allows Scops to be a joint-stock company (Société anonyme) or a Plc (société à responsabilité limitée). In 2012 43,860 people employed in Scops.8

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.