Shares in companies that are part-owned by their employees continue to outperform the FTSE All-Share index, according to research published today.
The Employee Ownership Index (EOI), published by law firm Field Fisher Waterhouse, compared companies that are more than 10% owned by employees with the performance of FTSE All-Share companies.
An investment of £100 in the EOI when the index began in January 1992 would, at the end of June 2012, have been worth £591; the same investment in the FTSE All-Share Index would be worth £235.
Graeme Nuttall, the Government’s independent adviser on employee ownership and head of equity incentives at Field Fisher Waterhouse, said: “The Employee Ownership Index continues to demonstrate that, in the long term, employee-owned companies perform better and continue to be a successful business model.”
The Government supports employee ownership and has committed to acting on recommendations put forward in Nuttall’s review, which provides a framework to move this model into the mainstream of the economy, in July 2012.
Jo Swinson, minister for employment relations, said: “We have already published a call for evidence on the right to request employee ownership. There are many great examples of employee ownership in Britain and we wish to promote this business model more widely.”