A practice that is struggling to find its way. It is carried by Moroccan banking groups and the subsidiaries of foreign companies and is subject to conditions linked above all to the holding period for the shares.
It is a financial and social practice that is still in its infancy in Morocco. This is the integration of employees into the capital of a company, aka “employee shareholding”. Currently, a dozen companies have engaged in this exercise, including Moroccan banking groups or Moroccan subsidiaries of foreign companies. Employees of Attijariwafa bank, for example, hold 2.17% of the capital, those of BCP 5.15%, CIH 5.27%, those of BOA 1.075% and those of LabelVie 1.90%. Foreign groups are more numerous in
carry out this type of practice, such as L’Oréal, whose employees of the Moroccan subsidiary were able to take part for the first time in the group’s shareholding plan, with 25 subscriptions, Veolia, Sanofi, Vinci, Capgemini, etc.
These employee participation operations in the capital are generally carried out through a capital increase or an initial public offering. A discount is often offered to employees to encourage them to join the operation, ranging from 10 to 20% compared to an average price of a few days before the operation. In the information notes for these operations, we understand that the managers launch these operations during the implementation of a development project over a certain number of years, in order to ensure the stability of the staff and to involve it heavily in growth programs, but also to strengthen equity and finance the development plan.
This hybrid status between employee and shareholder is beneficial both for the management team and for the employee. Depending on his vision for the future and his career plan, the employee joins this system to ensure savings, take advantage of the potential for price increases in the case of a stock market listing and access any information about the company. Sara Elouadi, teacher-researcher at the University Hassan II of Casablanca, lists three types of satisfaction of the employee-shareholder: intrinsic satisfaction linked to the pride of becoming a shareholder of his company. The instrumental satisfaction that emanates from the prospect of financial gain linked to dividends and the extrinsic satisfaction that comes from the political power that accompanies access to shareholder status, namely participation in decision-making and the right to information financial and strategic.
Although the proposal made to employees to become shareholders of the company is accompanied by a discount compared to the current price, it is not without conditions. One of them relates in particular to the holding period for the shares acquired. Attijariafa bank, for example, required during its last capital increase reserved for its employees to keep the shares for a period of 3 years, after which the shareholder can sell them up to 20% of the stock, annually. Another option is offered, that of holding them for 5 consecutive years and selling them in one go, as desired. However, the group has introduced exceptions to the liquidation of securities, in the event of marriage, divorce with custody of the children, etc. If one of the conditions is not met or if the employee-shareholder resigns, the difference between the subscription price and the closing price of the share must be returned in the event of a rise in prices. This type of conditions is standard among other operators who have integrated their staff into the capital of their company, whether for LabelVie, the BCP or others.
All good, even for the leaders
In fact, it’s a kind of win-win partnership between the employee and the managers. Beyond the solidification of the relationship of employees with their companies, this system offers a less expensive financing solution than bank loans and contributes to the consolidation of equity. This improves the financial ratios of companies. In addition, sharing capital with employees sends out a positive signal and helps to improve the reputation of the companies concerned. Not only that, employee ownership protects the identity of the company and helps form a shield against hostile takeover bids (OPA) or public exchange offers (OPE). Several examples testify to the loyalty of employee shareholders, including the example of Bouygues, which was able to counter the control attempt initiated by Bolloré. Employee shareholding was also the bulwark that enabled Société Générale to escape the hostile takeover bid launched by BNP.