Employee share ownership plans: Current practice and regulatory reform

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Project Overview

Source of funding
Australian Research Council (ARC) Discovery Project grant.

Funds received
$323 000

Duration of project
2006 - 2008

Project summary
This project, funded by the Australian Research Council (ARC), is a joint initiative of the Centre for Corporate Law and Securities Regulation, the Centre for Employment and Labour Relations Law and The Tax Group.

Employee share ownership plans (ESOPs) are important to the development of an economic culture of enterprise and innovation and the building of national wealth and savings in response to long-term demands of intergenerational equity. ESOPs require development through appropriate regulatory frameworks. This project will subject the existing regime of tax, corporate and labour law to technical and empirical scrutiny. It will produce the first comprehensive analysis of how currently legal regulation structures and constrains the use of ESOPs in Australian enterprises. It will examine the current incidence and forms of ESOPs in Australia, the diversity of objectives that such schemes serve, the extent to which current corporate, tax and labour law inhibit ESOPs, and the case for reform of the regulatory framework. This will enhance the capacity of policy makers to evaluate and identify appropriate regulatory techniques to ensure the growth of efficiency of ESOPs at the national and enterprise level.

Key parts of the project are:

1. A detailed analysis of the current use of ESOPs by focusing on issues such as how use of ESOPs varies by industry; the different types of ESOPs etc. This will entail empirical research in order to generate new data;
2. An analysis of how corporate law, labour law and taxation law impact upon the use of ESOPs;
3. Identification of the established and emerging social, economic and policy objectives of ESOPs;
4. Analysis of regulatory ‘fit’: that is, an examination of whether the regulation in this area provides a rational, coherent and sufficiently flexible legal framework with respect to the key social and economic objectives for ESOPs; and
5. Consideration of the case for regulatory reform.

For more information, contact:

Professor Ian Ramsay
Director, Centre for Corporate Law and Securities Regulation
Melbourne Law School
Tel. + 61 3 8344 5332. Email: Ian Ramsay