The prevalence and antecedents of employee stock ownership in Denmark

Abstract

The article tests the prevalence and antecedent of employee stock ownership (ESO) companies in Denmark. Based on a survey among the top 500 Danish companies, the article finds that the financial crisis has affected non-managerial workers’ willingness to invest in their company. While narrow-based schemes covering only top management have increased since 2000, the prevalence of broad-based schemes has declined. The article also finds that the antecedents of ESO companies are highly dependent on the type of ESOP. While companies with narrow-based schemes are smaller companies with a traditional view on strategy and planning and reluctance toward employee involvement, companies with broad-based schemes are large, listed companies with a focus on employee involvement. Additionally the findings indicate that non-managerial workers are more reluctant to invest in their company if the company has volatile or low financial performance.