(BFM Bourse) – The car manufacturer headed by Luca de Meo will award up to 14 free shares for every three shares purchased, with an additional 30% discount, as part of its third employee shareholding plan. The group is aiming for 10% of the capital to be held by its employees by 2030.
Renault is gradually moving towards one of its major objectives: to have 10% of its capital held by its employees by 2030. The manufacturer revealed this target during its investor day in November 2022.
This objective is ambitious. According to a study carried out by Eres in 2023, the two champions of the broader Paris Stock Exchange index are Bouygues (21.3% of capital held by employees) and Eiffage (19.3%). But the third, Vinci, is “only” at 9.9%.
To achieve this target, the automotive group launched two employee shareholding plans in 2022 and 2023 allowing its employees to obtain its shares under very advantageous conditions.
These plans have made it possible to increase the share of employees in the capital of the car manufacturer from 3.6% in 2022 to 5.07% currently.
The road is therefore still quite long to reach 10%, and Renault will, as a result, launch a third employee shareholding plan.
>> Access our exclusive graphic analyses, and enter the confidence of the Trading Portfolio
Nearly 100,000 employees affected
This time the company will award up to 14 free shares to its employees, compared to 16 last year and 12 in 2022.
Although this plan appears to be “less generous” than the previous one, it is appropriate to put the comparison into perspective by emphasizing that Renault shares have appreciated significantly in one year, with an increase of almost 18%. This is thanks to excellent results and the enthusiasm of analysts for its new models.
In detail, Renault will first award seven free shares to its eligible employees in 30 countries (see the list at the bottom of the article). To benefit from the award of these shares, employees must have three months of seniority continuously and discontinuously between January 1, 2023 and October 2, 2024. This contribution paid by the employer will be made without any investment obligation. According to the manufacturer, 98,000 employees will be eligible.
Then in 24 of these 30 countries (see the list again), Renault will offer an additional contribution of seven free shares for the first three shares purchased. And in addition, to acquire these shares, employees will benefit from a 30% discount, i.e. a subscription price of 29.26 euros compared to a reference price of 41.80 euros.
The subscription period will take place from September 18 to October 2 inclusive. Furthermore, the employee’s voluntary payment cannot exceed 25% of their gross annual remuneration for the year 2025.
Virtues
Let us recall that in the case of a company savings plan, capital gains are exempt from income tax and are only subject to social security contributions on investment income, i.e. 17.2%. Shares held under this plan must, however, be held for a minimum period of five years, except in certain cases of early release (marriage, acquisition of a principal residence, etc.).
Beyond the tax framework, employee shareholding often proves advantageous for employees, due to discounts and top-ups.
“Employees who subscribed to an employee shareholding operation, carried out by SBF120 companies between 2006 and 2017, were winners in 82% of cases with the dividend and the discount (without taking into account the contribution). An individual shareholder would have been a winner in only 76% of cases. Taking into account an average contribution rate of 100%, employees would have been winners in 94% of cases after 5 years,” explained Eres in its 2023 study.
From the company’s point of view, in addition to having a more robust core shareholder base with an increased presence of its employees in its capital, employee shareholding can also constitute a vector for employee loyalty.
“Companies with a very strong employee shareholding culture seem to value their human capital more. Their voluntary departure rate is almost two times lower than that of companies with a very weak employee shareholding culture: 6.8% compared to 11.3%,” Eres indicated in its study.
Countries concerned
For the abundance of seven shares
Germany, Argentina, Austria, Belgium, Brazil, China, Colombia, South Korea, Croatia, Spain, France, Hungary, India, Ireland, Italy, Malta, Morocco, Mexico, Netherlands, Poland, Portugal, Czech Republic, Romania, United Kingdom, Slovakia, Slovenia, Sweden, Switzerland, Turkey and Ukraine
For the acquisition of shares with a 30% discount and the additional contribution of seven shares
Same countries except China, Croatia, Hungary, Malta, Sweden and Ukraine.
Julien Marion – ©2024 BFM Bourse
Are you following this action?
Receive all the information on RENAULT in real time:
