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Financial Participation

Financial employee participation is not widespread in Lithuania. Although the level of employee share ownership was very high when Lithuania gained independence, it declined dramatically in the years following 1995.

 

 

The heyday of employee share ownership was between 1995 and 1997, after which a rapid decline started.1 This was mainly due to the fact that employees sold their shares obtained a few years before in the course of the privatization process. Furthermore, employee privileges with regard to purchasing company shares were abolished in the second and third privatization stages. Unlike in the first stage, after 1995 employees could only buy shares in the companies in which they were employed. Most companies were taken over by insiders, mostly by managers, within the framework of privatisation.

 

Share ownership also results from newly introduced financial participation schemes, developed especially in large, foreign-owned or IT-based companies. This movement started in particular after 2003.2

Concerning profit-sharing in Lithuania, some companies offer bonuses and premiums to their employees tied to company profits.

 

Starting with the late 1980s a large number of small cooperatives were created in the service and productive sectors. A series of new cooperatives emerged from the privatization process in the agricultural sector. About 4,500 cooperatives were registered in Lithuania in 1990, employing about 5% of the total workforce. After a period of uncertainty about the legal status of cooperatives, various types of cooperatives were established in the Lithuanian economy, such as consumer, agricultural, credit and production cooperatives. Most of them are small or very small, employing up to 9 people.

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.