engleski

ESOPs in Croatia – Controversies Concerning Employee Ownership

For the past 30 years employee ownership has been used in the western world as a tool of employee remuneration and participation. Generally, Employee Stock Ownership Plans (ESOPs) represent a form of employee ownership where employees acquire shares under some preferential status compared to ordinary (financial market) methods of acquiring shares. Consequently, ESOPs represent an organized, usually broad based form of employee ownership, which, according to circumstances such as time, place, and motives, may result in different proportions of employee equity to total equity, possibly providing influence in decision making. In Croatia, during the past year, there has been a revival of interest in employee ownership. In the summer of 2006 ESOPs (or ORD - Organized Worker Shareownership in Croatian) were announced to be included in the new Privatization Law to be passed in 2007. The announcement in the summer of 2006 was followed by a number of comments and counter-propositions that were reported in the press. In this paper we review recent developments concerning ESOPs and present some theoretical framework for reviewing three diverging propositions for institutionalizing ESOPs in Croatia. The issues to be discussed involve rationales for ESOPs (how do ESOPs benefit employees, companies and the society), understanding diffusion of ESOPs in Croatia since 2000 and future expectations concerning ESOP performance.

ESOP; ownership structure; Croatia

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