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Financial Participation

A survey by the Vienna Labour Chamber (Arbeiterkammer) shows that about one quarter of all companies offer profit-sharing in the form of a bonus on top of regular wages. 8% of companies have introduced employee share ownership schemes. It follows that 34% of Austrian companies offer employee financial participation.

The joint study commissioned by the Austrian Chamber of Commerce (WKÖ) and the Federal Labour Chamber (BAK) on the incidence of employee financial participation schemes arrived at the following results:1

Table 1: Incidence of employee financial participation schemes – questionnaire answered by companies (mainly SMEs):

Employee shares

8 %

No employee shares, but bonuses

25 %

Stock option plans

1 %

No employee financial participation

67 %

Source: Presentation following Kronberger et al. 2007

Table 2: Incidence of employee financial participation schemes – questionnaire answered by employee representatives (mainly in large industrial companies listed on the stock exchange):

Employee shares

16 %

No employee shares, but bonuses

33 %

Stock option plans

3 %

No employee financial participation

49 %

Source: Presentation following Kronberger et al. 2007

It is surprising that 16% of employee representatives questioned stated that there was an employee share ownership in existence in their company, whereas the corresponding figure for employers was only 8%. The different results are attributable to the two different company focuses used during the survey: employers were mainly surveyed in SMEs and workers representatives in larger companies.

According to the European Working Conditions Survey of 2010 company profit-sharing expanded by 8.9 per cent and employee share ownership by 1.9 per cent.2 Austria is thus somewhere in the middle by European comparison, but still below the EU average. According to the results of the European Company Survey 2009, which questioned more than 27,000 human resource managers in Europe 8 per cent of private companies in Austria with 10 employees or more offer their employees the opportunity for profit-sharing and only 2 per cent employee share ownership.3

The Cranet survey (2010) with its limited focus on companies employing more than 100 workers found that in only 9.4% of all companies at least 50% of the workforce took part in employee share ownership schemes. The incidence of profit-sharing was 48.4%.4 In comparison with the results of earlier Cranet surveys the proportion of workers’ participation has risen significantly in recent years.5 This state of affairs is to be traced back primarily to the tax concessions introduced in the area of workers’ participation. Thanks to these changed conditions the importance of employee financial participation has thus risen in Austria.

Employee share ownership schemes are generally offered to a company’s whole workforce. They are widespread in large companies, whereas profit-sharing schemes are more common in limited companies and joint partnerships. Profit-sharing schemes are often bonus-based, with bonus payment dependent on such financial criteria as turnover, EBIT or cash-flow.

Employee share ownership

The incidence of employee share ownership is dependent on companies’ legal status. Employee share ownership schemes are found mostly in public companies listed on the stock exchange (45%), and in cooperatives (“Genossenschaften”), foundations (“Stiftungen”) and associations (“Vereine”). 18% of unlisted public companies and 6% of limited companies (“GmbH”) offer share ownership schemes. But they are hardly used at all in joint partnerships („Offene Handelsgesellschaft“, „Offene Erwerbsgesellschaft“, „Kommanditgesellschaft“, „Kommanditerwerbsgesellschaft“).

Workers’ participation models are found most frequently in banking/savings banks (55 per cent), information and consulting (13 per cent) and industry (11 per cent).

The relatively high incidence of employee share ownership in public companies is attributable on one hand to share tradability. At the same time, many private companies have taken advantage of the favourable sentiment on the Vienna stock exchange in the wake of capital increases for participation systems. On the other hand to the (partial) privatization of former state-run companies in the last few years with shares being reserved for employees. In a number of these companies trust schemes were developed.. A particular example is the Austrian steel company Voestalpine AG with over 40,000 employees worldwide. In 2000 the company implemented a workers’ participation model that was developed with the intensive participation of interest representatives in the group in the wake of the sale of the Austrian state’s holding to Voestalpine (which up until then had had around 39 per cent). The basis of the participation model is the idea of »strategic ownership« of their own company by the workforce. The participation system was conceived of as a contribution to the stability of the ownership structure and thus to long-term development and ensuring that the company remained at its present location. Employees’ voting rights are pooled for the long term and administered in trust by the Voestalpine Workers’ Participation Foundation. The foundation is the second largest individual shareholder and is represented in its bodies on a parity basis with representatives of management and the works council. !3 per cent of the shares in the company are held by employees. Thus hostile takeovers are obstructed or hindered in advance because the necessary majority of 90 per cent of shares required in Austria for total incorporation of a limited company cannot be achieved (the squeeze-out threshold in Austria is 10 per cent).6


Profit-sharing is the main form of participation in limited companies, in use in about one third of all such companies. A similar incidence is to be found in public companies. Nearly one half of all unlisted public companies offer profit-sharing schemes. In principal it is possible to invest profit-based bonuses in company shares instead of receiving them in cash. About 40% of companies offer such conversion possibilities.

According to the "European Company Survey”, the prevalence of employee profit-sharing schemes in Austria rises exponentially with company size. While only 7% of companies with 10-49 employees and 11% with 50-199 employees offer profit-sharing schemes, prevalence reaches 30% in companies with more than 200 employees.7

Stock Options

Employees may also receive stock options in addition to their regular salaries. Shares can be bought at a later date at a price fixed today. Stock option schemes are common in listed companies, being offered to management and board members.

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.