Launching a European Employee Share Ownership Plan (European ESOP)

With a third of business successions failing, the EU is still confronted with a haemorrhage of around
150,000 enterprises and 600,000 jobs every year. Although 30 years of research have confirmed the positive
effects of employee share ownership (ESO) for European enterprises and its important function for business
succession, best practice, such as the US ESOP, is thinly spread across the EU. Nevertheless, Member States (MS) have developed a broad variety of ESO schemes involving intermediary entities to acquire and administer
employee shares in the employer firm in particular for the transfer of businesses to employees. However, for
small and medium enterprise (SME) owners the main barrier is still a lack of clearcut and transparent options to sell their enterprise to their employees and corresponding incentives to do so. In this light, this paper proposes a European approach, that is, a European Employee Stock Ownership Plan (European ESOP).

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