Employee-owned companies underperform in Q1 of 2010

Employee-owned companies underperformed in the first quarter of 2010 compared to the FTSE All-Share companies, according to the UK Employee Ownership Index (EOI) report.

The report, published by law firm Field Fisher Waterhouse, showed that employee-owned companies’ share prices were only up 3.2% in the quarter in comparison to the FTSE All-Share companies’ share prices which were up 5.4%.

However employee-owned companies are showing resilience in the long-term. Since it began in 1992, the EOI shows that employee-owned companies have outperformed FTSE All-Share companies each year by on average 10%.

Over successive three year periods they have outperformed by 41% and over successive five year periods by 78%.

Graeme Nuttall, head of the equality incentives team, Field Fisher Waterhouse, said: “The first quarter of this year saw employee-owned companies performing less well that the FTSE All-Share.

“If, however, we look at performance over longer periods of time we see that despite variations in relative performance from quarter to quarter, the EOI demonstrates that in the long term employee-owned companies do better, proving to be more resilient than FTSE All-Share companies.”

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