Employee Shareholders (Quick Revision)

Question 1

Define: Employee Shareholders

Answer 1

Employee shareholders are employees who are owners of the company they work for.

Question 2

Every shareholder in a company has one vote. True or false? Explain.

Answer 2

False; it is one vote per share, not per shareholder

Question 3

All companies are owned by their employees. True or false?

Answer 3

False; they are owned by their shareholders -

Some of these may be employees, but they do not have to be.

Question 4

State three benefits of holding shares.

Answer 4

• Share price may increase
• Dividends
• Shareholders get one vote per share

Question 5

State three factors that may determine whether owning shares will motivate employees.

Answer 5

• Likely change in share price
• Number of shares
• Value of shares

Question 6

What is the Examiner’s note for Employee Shareholders?

Answer 6

Some firs give their employees shares as a way of motivating them to be concerned about the progress of the business. Shares are also a way of rewarding staff without committing the company to paying a higher salary.

Question 7

What is the Evaluation point for Employee Shareholders?

Answer 7

The power of employees as shareholders depends on what proportion of the firm they own.