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Financial Participation

There is no legislation in Sweden governing direct employee participation in a company’s profits.1 The one exception is state support for the transfer of company profits to special “profit-sharing trusts” set up by employees or their representatives. Monies transferred to these trusts are primarily used to reward employees for their performance.2

Profit-sharing in the form of profit-sharing trusts

Profit-sharing plays a relatively big role in Swedish companies, compared with the rest of Europe. About one fifth of all companies offer schemes, mainly in the form of “profit-sharing trusts”.3 A 1981 law on social security contributions regulates the establishment of statutory funds, into which companies can transfer profits. These funds are established by employee representatives in the company. Trust funds are supposed to reward employees for their efforts, although they have no specific entitlement in this regard.4

According to the findings of the fifth European Working Conditions Survey (EWCS)5 2010 19.3% of employees in Sweden have profit-sharing. The data for the survey were gathered within the framework of individual questionnaires of employees in companies of different sizes. This puts Sweden in the top third with regard to profit-sharing by European comparison and well over the European average of around 12.5%.

Similar results were yielded by the European Company Survey 2009. According to this survey of more than 27,000 HR managers in Europe 24% of Swedish private-sector companies with 10 or more employees offer their employees a profit-sharing scheme, well above the 30-country European average of 14%. The prevalence of employee profit-sharing schemes rises in line with company size. 23% of companies with 10-49 employees, 27% with 50-199 employees, and 34% of companies with more than 200 employees have a profit-sharing scheme.6

The Cranet study 2011 concludes that in Sweden there are profit-sharing schemes in 22% of companies with 100 employees or more.7 This value is well below average.8 HR managers in 29 countries were interviewed for the survey on the incidence of workers’ financial participation schemes in their firm.

Employee Share Ownership

Participation schemes frequently involve managerial staff9 . Broad-based participation schemes oriented towards larger groups are usual in particular in telecommunications and IT.10

According to the results of the European Company Survey, 11% of Swedish private-sector companies offer their employees share ownership schemes. This puts Sweden well over the European average of just over 5%.11 These employee share ownership schemes cover 5.5% of employees, according to the EWCS 2010. Here, too, Sweden is above the European average of around 3%.12 The findings of the Annual Economic Survey of Employee Ownership in European Countries in 2012 show that 43% of the largest Swedish corporations offer comprehensive share ownership schemes covering the whole workforce (European average: 53.3%).13

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.