Warning about profit-sharing

Press, Volume CXI, Issue 32566, 27 March 1971, Page 3

Warning about profit-sharing

(N.Z. Press Association) PALMERSTON NORTH, March 26. A warning against

employees having a stake in the company for which they work was given by the president of the New Zealand division of the Chartered Institute of Secretaries (Mr H. M. Speakman) tonight.

Speaking at the division’s annual meeting in Palmerston North, Mr Speakman said that although he supported the idea in principle, there would have to be a guard against any form of back-firing in case of the company suddenly striking financial disaster and the employee losing part, or all, of his hard-earned capital.

“The unexpected failure of Rolls-Royce in England comes to mind," he said. “Nevertheless, this whole important subject merits the attention of an institute such as ours, as there has been success in other countries, and in a minor way New Zealand also. “One method is to issue

capital stock to employees, after a number of years of service, the worker buying the shares at rates well below market value. “Another way is for a certain percentage of shares to be allocated to employees with a proviso that the shares are sold back to the company when they leave its employ, and then there is the method of companies contributing a sum based on their turnover into a fund and from this fund shares are issued to employees.” The whole question of profit sharing or share investing by employees was worthy of full research and would certainly lead to a lessening of disharmony in industrial relations, Mr Speakman said.