Employee Participation in Employee Share Ownership Plans: The Law, Company Objectives and Employee Motives

Australian Journal of Labour Law, Vol. 25, No. 1, pp. 1-22, 2012

U of Melbourne Legal Studies Research Paper No. 601

23 Pages Posted: 29 Jun 2012 Last revised: 14 Aug 2012

Michelle Brown

University of Melbourne - Department of Management

Rowan Minson

University of Melbourne - Law School

Ann O'Connell

University of Melbourne - Law School

Ian Ramsay

Melbourne Law School - University of Melbourne

Date Written: May 1, 2012

Abstract

Although Employee Share Ownership Plans (ESOPs) are widely used in Australian companies, little is known about why employees participate in these plans. Yet understanding employee motivations for share ownership has significant implications for corporate governance, human resource practice and public policy. We first review the history of ESOP regulation in Australia in order to identify Federal Government policy rationales for ESOPs. We then identify employee motives for participating in employee share plans. Two hypotheses, using data from both employee shareholders and non shareholders in Australia are investigated: that employees participate because they are motivated by financial considerations or they participate because they believe share ownership is a way of increasing their involvement in decision-making at work. We then compare employee motivations for participating in ESOPs with the policy rationales advanced by the government for its support of ESOPs. We find, based on this comparison, that there is a mismatch between the employee motivations and the government’s policy rationales and we identify the implications of this finding for public policy.

Suggested Citation

Brown, Michelle and Minson, Rowan and O'Connell, Ann and Ramsay, Ian, Employee Participation in Employee Share Ownership Plans: The Law, Company Objectives and Employee Motives (May 1, 2012). Australian Journal of Labour Law, Vol. 25, No. 1, pp. 1-22, 2012; U of Melbourne Legal Studies Research Paper No. 601. Available at SSRN: https://ssrn.com/abstract=2095800

Michelle Brown

University of Melbourne - Department of Management ( email )

200 Leicester Street
Melbourne, Victoria 3053
Australia
+61 3 9344 7872 (Phone)
+61 3 9349 4293 (Fax)

Rowan Minson

University of Melbourne - Law School ( email )

University Square
185 Pelham Street, Carlton
Victoria, Victoria 3010
Australia

Ann O'Connell

University of Melbourne - Law School ( email )

University Square
185 Pelham Street, Carlton
Victoria, Victoria 3010
Australia

Ian Ramsay (Contact Author)

Melbourne Law School - University of Melbourne ( email )

University Square
185 Pelham Street, Carlton
Victoria, Victoria 3010
Australia
+61 3 8344 5332 (Phone)

HOME PAGE: http://law.unimelb.edu.au/about/staff/ian-ramsay

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