According to a recent study by Bitkom Research Startup employees rarely own company shares. Only one in four startups has employees financially involved.
For the study, around 321 IT and internet startups were surveyed about employee involvement in the company.
The result: In only 27 percent of the startups surveyed, employees outside of the founding team own shares in the startup they work for. In half of the companies, the founding team holds all shares. 27 percent of the startups surveyed declined to comment on the topic.
In companies where employees own shares, the number of shareholders among employees is limited to one to a maximum of four (72 percent). 22 percent have five to 19 employees. Only 6 percent have more than 20 employees.
Company shares for employees: What speaks against it
Startups that do not involve their employees cite various reasons for this. 24 percent cite the fact that their employees prefer traditional salary payments. 17 percent say they have not yet addressed the issue or are wary of the bureaucratic burden, and 15 percent do not want to divide their shares among so many individuals. Tax considerations also play a role: 17 percent justify their decision by citing the unattractive tax treatment of employee models in Germany. 4 percent fear that it would make it more difficult for the company to make decisions.
Reasons for employee participation
For 80 percent of startups that issue shares to employees, long-term employee loyalty is a reason for investing. Furthermore, 79 percent hope that direct ownership increases the motivation of the employees involved. 49 percent see it as their moral duty to issue shares to employees, and 46 percent hope this will make them more attractive to applicants whose salary expectations they cannot meet through traditional means. Furthermore, 34 percent want to keep personnel costs and thus monthly expenses low.
"Startups compete with medium-sized or globally operating companies for sought-after specialists – but generally cannot raise the same financial resources when it comes to attractive compensation packages. Employee ownership can be an attractive alternative for everyone involved, especially in fast-growing companies like startups."
says Jenny Boldt, Head of Startups at the digital association Bitkom.
