Exploratory Study of the Attitudinal Effects of Employee Shareholding in Morocco

Introduction

The Covid-19 pandemic has confronted the world's economies with an abysmal financial crisis. Indeed, the fear of the spread of the virus has paralyzed the productive system, forcing many companies to file for bankruptcy, unable to absorb the shortfall in demand. This unprecedented situation is characterized by the simultaneous contraction of supply and demand, and has plunged governments into a climate of uncertainty and opacity regarding the long-term effects of the disease.

The need is felt, more than ever, for a real recovery plan to bail out the Moroccan economy and save businesses from certain death. This rescue plan must pass, inescapably, by the reconstitution of the economic capacities of our country to instill a climate of confidence between the employees and the companies. A change of governance and management codes within companies is necessary by giving voice and the right to action to employees.

All over the world, managers and politicians are in favor of employee share ownership because it has many virtues for employees, the company and the state. Indeed, ownership of shares brings a lot of satisfaction to employees and induces positive changes in work behaviors, including improved productivity, motivation and organizational commitment. Also, the funds brought by employee shareholders for the purchase of shares are likely to feed the treasuries of the companies and, thus, instill a new financial dynamic.

The State will also benefit from the virtues of employee shareholding because of the increase in tax revenue linked to the safeguarding of employment and the stimulation of economic activity.

Employee share ownership is booming in Europe, according to the French Federation of Employee Shareholder Associations, the number of employee shareholders in Europe amounts to 10 millions. And the share of employees in large European companies has continued to increase throughout the European crisis, from 2.37% in 2006 to 2.85% in 2019, or 350 billion euros in May 2019, and increased to 400 billion in early 2020. Also, the number and percentage of large European companies with employee stock ownership plans continues to grow. In 2019, 89% of companies had employee stock ownership plans, 62% had stock option plans and 52% organized plans for all employees. The Coronavirus pandemic seems to make employee share ownership more concrete among French companies, which see it as a real asset for economic recovery. The Minister of Public Accounts, Gérald Darmanin, has expressed his willingness to generalize the practice and proposes to “resurrect the great idea of profit-sharing: employees become shareholders of their company, they receive their share of the profits it makes, and they increase their purchasing power, in addition to their salaries, through profit-sharing”.

Moreover, in most large European companies, the increase of employee share ownership is evident. The percentage of large companies with significant employee ownership has risen from 46.5% in 2006 to 56.5% in 2019.

In the United States, there are currently 14 million employee shareholders in the famous ESOP (Employee Stock Ownership Plan) model launched in 1974. More recently and in order to stem the deleterious effects of the crisis on the American economy, Ron Johnson, one of the most conservative members of Congress, and Representative Alexandria Ocasio-Cortez, one of the most liberal, have both presented radical proposals to expand employee ownership in the United States.

In Morocco, employee shareholding operations are not common and almost exclusively concern large national groups and subsidiaries of foreign multinationals. At national level, employee shareholding operations generally accompany the first Initial public offerings and suffer from their low occurrence.

Indeed, over the last five years, nearly 79% of Moroccan companies having introduced employee share ownership have set up a single employee ownership plan and this at the time of their first Initial public offerings. Capital increases are the second most common way of granting shares to employees. The third position is occupied by Public Sales Offers.

We believe that the unpopularity of employee ownership in Morocco is due to three main reasons. The first one is the legislative delay and the lack of an incentive framework for employee savings. For it is only in 2013 that a law was voted for the implementation of the Company Savings Plan.