Sharing Shares with Employees: Tools and Empirical Evidence from Lithuania

Abstract

This paper discloses the situation, specifics, tendencies, and limitations of employers’ adjustment to employee financial participation (sharing shares) in companies in Lithuania. Three main tools are analyzed: the issuance of employee shares (known since 1990); a share granting (effective since 2018); and employee stock options. The empirical part of the paper is based on interviews conducted in 2019 and repeated in 2022–2023 with expert lawyers from Lithuanian law firms, alongside a survey of Lithuanian companies. The following aspects were analyzed: employers’ knowledge of the possibilities of involving employees in company management (activities); instruments used by employers to implement employee financial participation; reasons that prevent successful employee involvement and barriers from the perspective of employees; tax-related issues; and measures that could facilitate greater employee involvement within the company. The research results show that there is a tendency that promotion via shares is becoming more popular and that business culture is slowly evolving. Employee stock options are the most used instrument, surpassing the use of statutory tools to grant shares to employees.

Keywords

• employee financial participation
• share granting tools
• employee stock option
• employee shares