Mr. Sasseville is an expert on [...]]]> The Head of Tax Treaty Unit of the Organisation for Economic Co-operation and Development, Jacques Sasseville, is to speak on double taxation issues at the ESOP Centre’s 24th Annual European Conference, which takes place in Paris on June 21 & 22 2012.

Centre chairman Malcolm Hurlston said: “We are extremely glad that the OECD is joining the Centre’s efforts to spread the wages of capital. The OECD occupies a privileged position to pioneer the development of ESOP structures worldwide, as it is arguably the most important international economic body which embraces all countries where a variety of strong employee ownership models are already implemented.”

“I am very grateful to Malcolm Hurlston [...]]]> Norman Lamb, the Minister for Employment Relations, Postal and Consumer Affairs, praised the Centre’s work at its annual conference on share schemes for SMEs on May 15, organised in collaboration with the Institute of Directors.

“I am very grateful to Malcolm Hurlston and to the ESOP Centre for all the work done in the promotion of employee share schemes over the past twenty years. The biggest barrier to wider employee ownership is likely to be the lack of knowledge – and events such as today’s are one of the best ways to overcome it”, said Norman Lamb in his keynote speech to the conference delegates.

Mr Lamb confirmed that he had long been an advocate of employee ownership as he felt the idea fits within the Liberal tradition of John Stuart Mill.  “ These days, when there is so much concern about irresponsible behaviour in capitalism, having diversity in our economy in terms of ownership is surely a good thing “ Mr Lamb said. While in opposition, Mr Lamb had come up with a Lib Dem blue-print for the future of the Royal Mail and Post Office which included mutualisation and so he was delighted to be able to see this through to reality in his role.

His vision is that this should be the decade of wider employee share ownership, just as the 80s was the decade of ownership in general.

Despite having a broad portfolio, Mr Lamb said he was delighted to have been asked by the Deputy Prime Minister to champion employee ownership and find ways to promote it further. In February he appointed Graeme Nuttall to lead a review of barriers to the sector, which will report to Government with recommendations in July.

“I believe employee ownership and share schemes can play an important role in future economic growth and this review is now my number one priority as a government minister”, Mr Lamb stated.

Employee share ownership may currently represent a small part of the economy, but studies now show that the sector has grown and can be more profitable, more productive and more resilient during difficult economic times than conventionally owned businesses.

“Companies with engaged staff also enjoy wider benefits, such as reduced absenteeism, increased employee retention and better job satisfaction” said Mr Lamb, adding “It’s easy to see why – having a stake in your workplace also encourages a sense of responsibility, which motivates employees to contribute more”. For this reason alone, Mr Lamb argued employee ownership should be promoted in more companies, leading to “engaged economic citizens”, an idea which sits at the heart of responsible capitalism.

It was an information packed [...]]]> Our Employee share schemes for SMEs conference, held at the Institute of Directors on May 15, saw the participation of minister Norman Lamb and government adviser Graeme Nuttall among others.

It was an information packed day with nearly 100 delegates and a number of excellent presentations.

Below you can find the conference material kindly prepared by our expert members.

If you have any comments or questions, you are very welcome to post them below. Alternatively, you can email us (esop@esopcentre.com) or call us (0207 239 4971).

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1) Ian Murphie, MM&K

Introduction to Share Schemes

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2) Matthew Findley, New Bridge Street

You can access the first issue at this link, or browsing it below.

The bulletin will be published on an ad hoc [...]]]> The HMRC’s employment-related shares and securities unit has introduced a new newsletter for their customers and stakeholders to keep the industry informed of its latest thinking.

You can access the first issue at this link, or browsing it below.

The bulletin will be published on an ad hoc basis to update the public on the outcome of various stakeholder forums.

Please send suggestions for how it could be improved or what you would like to see in the next edition to esop@esopcentre.com or shareschemes@hmrc.gsi.gov.uk.

In the past few weeks, boardrooms on both sides of the Atlantic have been shaken by a series of shareholder rebellions against excessive executive pay packages.

An average 10.5 per cent of shareholders have voted against remuneration reports thus far in 2012, a much higher figure than during the period between [...]]]>

In the past few weeks, boardrooms on both sides of the Atlantic have been shaken by a series of shareholder rebellions against excessive executive pay packages.

An average 10.5 per cent of shareholders have voted against remuneration reports thus far in 2012, a much higher figure than during the period between 2004 and the global economic crisis.

The most prominent scalp was taken by Aviva shareholders, who have voted down CEO Andrew Ross, forcing him to resign from his post.

Ross is in good company. Trinity Mirror chief Sly Bailey stepped down after nearly a decade at the lead of the publishing company, as did David Brennan of pharmaceutical giant AstraZeneca. In the US, the General Electric annual meeting was far from sunshine and smiles as protesters urged executives to “pay their fair share”. Over a third of Immarsat, UBS and Barclays shareholders voted down remuneration packages. Unilever, Centrica and Deutsche Bank execs are some of those next in the lion’s den.

The core questions asked by the dissatisfied shareholder are very straightforward: why should executives’ remuneration stay sky-high while the companies they are managing are stuttering? Why has executive pay  increased steadily, while investors have suffered through the downturn? Dividends have increased recently, but this is because companies are stockpiling cash rather than investing – not a sign of confidence.

“The most capitalist of revolutions”, as it has been dubbed, points at an issue wider than the mere financial fight between City barons. It reminds us of the two fundamental rights of a shareholder: participation in profits and participation in ownership. Taking part in the wages of the company’s capital is an essential attribute of stock owners, but it is far from being the only one. The decision-making power of shareholders is too often overlooked, in the UK especially (baffling outside observers), and yet it is supposed to be the centre ground on which the principle of share ownership stands.

Employees, as the most natural recipients of their companies’ shares, can in addition provide an appropriate counsel for the management of the business they work in on a daily basis. Could greater interaction between the boardroom and the workforce contribute to the sound management of their shared company? The leading Liberal Democrat think tank, CentreForum, has called for 5 percent of  all company share capital to be available for an employee share ownership scheme in a recent paper on the subject. With Nick Clegg, Ed Davey and Norman Lamb all believers in the concept of employee ownership, this is an area the Lib Dems will  look to develop. With 5 percent, employees would have a strong voice on any vote. The next protagonists of “the most capitalist of the revolutions” could be the employees themselves.

On Monday in Brussels, Centre chairman Malcolm Hurlston addressed the European Centre of Employers and Enterprises Providing Public Services or CEEP. He reviewed the  considering an employee share ownership scheme, [...]]]>
Public services may represent the next great opportunity for the expansion of employee share ownership schemes.

On Monday in Brussels, Centre chairman Malcolm Hurlston addressed the European Centre of Employers and Enterprises Providing Public Services or CEEP. He reviewed the diversity of models available for public services considering an employee share ownership scheme, within the UK and from across Europe.

CEEP has just completed a project to review how employee financial participation (profit sharing, gain sharing and employee share ownership) could potentially provide new sources of financing for public services at a time when governments are so strapped for cash.

Much like in the private sector, Mr Hurlston said, no one model will fit every circumstance. He pointed to the ESOP Centre’s study of employee share ownership in past privatisations, written as a guide for the future of Royal Mail in 2010. (At least 10 percent of any future structure for Royal Mail must be devoted to an employee share scheme according to the Postal Services Act.)

If lessons are to be drawn for the future, they are that slavishly adhering to one set of rules risks ignoring the specifics of the individual company where it is probably best to tailor each share ownership scheme to fit the aims and ambitions of the organisation.

That is why it is pleasing to report a growing diversity of projects around Europe being conducted in our field. The Municipality of Verona and the Basque region are conducting a joint project on how to improve public services through the use of EFP. Our own government recently announced an innovative, if unproven, model for MyCSP – roughly one third state-owned, one third mutual and one third private sector partner.

The ProEFP project and Pepper IV report update, in which the ESOP Centre is the UK partner organisation, are collecting best practice models from across Europe so we can harness this diversity. Encouraging signs of progress from around the EU to report on Europe Day.

Norman [...]]]> Minister Norman Lamb will open the ESOP Centre’s conference on employee share schemes for SMEs, to be held at the Institute of Directors, London, on May 15 alongside Graeme Nuttall, government adviser on employee ownership.

Norman Lamb is the Government’s Minister for Employment Relations, whose responsibilities include employee ownership. He has been a strong advocate of the industry since his appointment, in February 2012. Norman is closely involved with the Lib Dems policy review, very active in this area after Nick Clegg’s appeal for a decade of employee share ownership. As a former employment lawyer, Norman’s grasp of the technical issues involved in promoting wider employee share ownership is second to none.

One of Norman Lamb’s first moves was to appoint Graeme Nuttall of FFW LLP as government adviser on employee share ownership. Graeme has also agreed to speak at the ESOP Centre’s 24th European summer conference in Paris in June.

The May 15 conference at the IoD will feature a first class speaker line-up. There are still few places available, you can book yours through this link.

A crowd of over forty delegates, most of whom were trustees from the Channel [...]]]>

From left to right: David Poole, Paul Malin, James Hodgson-Barker, Amanda Flint, George King IV, Rosemary Marr, William Franklin

The ESOP Centre’s annual conference for trustees was held on April 27 at the Royal Yacht Hotel in St Helier, Jersey. As usual, the conference was organised in partnership with the Society of Trusts and Estate Practitioners STEP Jersey.

A crowd of over forty delegates, most of whom were trustees from the Channel Islands, interacted with the speakers in lively Q&A sessions, enriching the excellent presentations with very interesting discussions.

David Poole of the ESOP Centre outlined the Office of Tax Simplification’s review, which is to include Employee Benefit Trusts as well. If you wish to contribute to this part of the review, please download the OTS questionnaire for trustees and send it back to dpoole@esopcentre.com – it will only take approximately 15 minutes of your time.

James Hodgson-Barker of Mark Davies & Associates/nondom.com spoke extensively about disguised remuneration, breaking down complex rules into digestible parts. Bottom line: get to know the legislation, and you won’t be scared of it anymore. Linking to that, lawyer and former HMRC adviser Amanda Flint addressed specific forms of unapproved share schemes, helping trustees to avoid falling in disguised remuneration traps.

Paul Malin of accounting firm Haines Watts told delegates about what was happening in practice: case studies negotiated by Haines Watts provided the participants with a first hand account of HMRC settlements. William Franklin of Franklin & Pett LLP warned delegates that the new IFRS10 will come into being for accounting periods beginning January 2013, and that EBTs will probably be caught by the control test specified for the new rules.

RBC Wealth Management’s George King IV provided a fascinating overview of the equity markets. There are many factors which could derail the sluggish world recovery, but several point towards equities looking reasonably priced compared to debt – good news for the employee equity world.

In her offshore update, Rosemary Marr, vice president of STEP Worldwide, acknowledged the difficulties of trustees in coping with regulatory changes and encouraged further cooperation between Jersey and Guernsey.

Malcolm Hurlston, chairman of the ESOP Centre, will take part in the expert panel discussion on  “Profit Sharing: example from Public Services providers”. He will [...]]]> The European Centre for Employers and Enterprises providing Public services (CEEP) will hold a seminar on Employee Financial Participation in Brussels on May 7.

Malcolm Hurlston, chairman of the ESOP Centre, will take part in the expert panel discussion on  “Profit Sharing: example from Public Services providers”. He will be speaking about EFP in the privatisation process, having a close look to the Royal Mail case.

Employee Financial Participation refers to any scheme which enables employees to participate in profit and enterprises’ results. This could be by profit sharing (by cash, shares or deferred payment), gain sharing (payment of additional amounts to employees based on the performance) or employee share-ownership (employee is owner as individual or in group).

The CEEP seminar will present the key outcomes of a study led in 2011–2012 on EFP in public services. Delegates will examine the advantages and disadvantages of EFP in the current economic and financial situation for public services. What are the main advantages of EFP for public services? Is it a solution for enterprises in the current economic and financial situation?

The seminar will bring together various experts and practitioners from across Europe.