History of employee shareholding

At Renault, the French law of January 2, 1970 allowed the free distribution of shares. But, despite some initial success, this experiment encountered staff reluctance and the closure of the secondary market for these securities (the shares were only transferable to the State) ultimately condemned this experiment.

During the first partial privatization of RNUR in 1994 (Renault SA), the State retained 52.98% of the capital which increased by 2 million francs. Renault shares are sold for 176 francs per share to institutional investors and 165 francs per share to Renault employees. The first quote is 180.90 Francs, so it’s a good deal.

The first Employee Share Ownership plan at Renault took place in 2001, as part of a capital increase. The price paid by employees was €27 per share. At the end of the 5 years of blocking, the share price was above €80, which already offered significant added value.

But by waiting two more years, the price would rise above €110. For those who missed this opportunity, another period of prices above €80 was reached between 2015 and 2018.

But the capital gain on the resale of shares is not the only profit achievable. Employee Shareholders do not receive a dividend, but the equivalent thereof is immediately converted into additional shares, which increase accordingly.

This graph opposite shows that for one share acquired in 2001 and held to this day, the employee would now have 1.7 shares thanks to dividends. Which, on the one hand, increases the profit in the event of a transfer, and on the other hand gives more weight to the employee's vote at the General Meeting.

The following year, a second Employee Share Ownership plan was implemented, this time due to a transfer of shares by the State, which legally required reserving 10% for employees. The price paid by employees was €41.44. If the possible capital gain was therefore reduced compared to the 2001 Plan, the favorable periods for resale remained the same and the additional shares obtained due to unreceived dividends remained very close to those of the 2001 Plan.

After 16 years, a new sale by the State imposed a new Plan, in an unfavorable period: the price was high and the price paid by employee shareholders was €58.32. Between the launch and the acquisition of shares by employees, the price will fall below the subscription value, which will not help give employees confidence! Given the current price, you will still have to be patient to hope to realize any added value. A secure formula at 3% per year was offered as an option, but this involves a transfer of shares on May 31, 2023, no longer allowing those who have chosen to be Employee Shareholders beyond this date.

Driven by the desire of the group and in particular of its Chairman of the Board of Directors Jean-Dominique Sénard, to develop Employee Shareholding and increase it to 10% before 2030, the plan proposes for the first time the acquisition of free shares without conditions. With a price offered to employees of €22.02 for the acquisition of additional shares, it is also the best offer since the privatization of Renault.

After the 2022 plan which made it possible to cross a symbolic threshold in the number of Employee Shareholders, the 2023 plan renews the same principle with very similar conditions with the result of exceeding for the first time the percentage of 5% of the capital held by employees. With a share priced at €26.28, the operation remains very attractive.

Plaidoyer pour l' "association" dans les entreprises - Charles de Gaulle, paroles publiques (ina.fr)

L'actionnariat salarié : vers un véritable partenariat dans l'entreprise (senat.fr)