Home / National Industrial Relations / Countries / Czech Republic / Financial Participation / Basic Data on Profit-Sharing/Employee Share Ownership

Financial Participation

Share Ownership: Out of 1,688 state enterprises transformed into joint-stock companies in the course of the privatization process, 480 proposed and received approval to privatize part of their shares as employee shares. At the end of the day, only 171 actually gave shares to their employees.1 Due to the asset overvaluation problem, officially overvalued companies had no interest in buying employee shares from the Fund of National Property, so that employee share ownership remained insignificant, representing only 0.31% of privatized assets.

In the framework of voucher privatization the portion of shares allocated to employees was only about 1.5% of total shares under consideration. Some companies – private, as well as privatized and joint-venture companies – had introduced other forms of employee ownership independently of the privatization process. Some issued ‘employee shares’ while others gave employees the right to buy shares. In most cases their ownership share in the company remained insignificant (that is, as low as 1%). With regard to stock options, these are generally only available to top management (especially in banking and telecommunications). They are also used sometimes in small, new-technology-based start-ups, but no information is available on their scope or relative importance.

According to the fifth European Working Conditions Survey (EWCS)2 of 2010, which was based on a questionnaire of employees, employee share ownership models are not widespread among private companies, at 1.3%. Thus the Czech Republic is in the bottom third by European comparison and below the European average of around 3%.

The European Company Survey (ECS 2009), a survey of more than 27,000 HR managers in Europe, comes to a similar conclusion. According to it, a mere 1% of private-sector Czech companies with 10 or more employees offer their employees a share ownership scheme. This puts the Czech Republic in last place in the country ranking of prevalence of such schemes.3


According to the PEPPER reports, profit-sharing is rare in the Czech economy.4 One reason is that there are no tax incentives. Currently, most existing profit-sharing plans are to be found in foreign companies. However, according to the fifth European Working Conditions Survey (EWCS)5 of 2010 with regard to profit-sharing schemes the Czech Republic ranks above the European average of around 12.5% with a value of 17.8%.

The European Company Survey also contradicts the results of the PEPPER Reports and registers similar results for the Czech Republic as the EWCS. Thus 17% of private-sector Czech companies with 10 or more employees offer their employees a profit-sharing scheme. Compared with other European countries, this is a slightly above-average figure (the 30-country European average is 14%). The incidence of employee profit-sharing schemes rises exponentially as a function of company size. Whereas 16% of Czech companies with 10-49 employees have a profit-sharing scheme, the figure rises to 26% in companies with 50-199 employees, and to 30% in companies with more than 200 employees.6


Following the dissolution Czechoslovakia in 1993 cooperatives accounted for about 4% of the total number of registered companies but within two years this figure fell to 3%.7 Cooperatives have played no major role in the productive sector of the Czech economy.

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.