June 1, 2023

Profit sharing: “Participation must be the reference tool”

François Perret, Managing Director of Pacte PME, has been entrusted by the government with a mission to promote profit-sharing and participation. This was initiated in 2019 and renewed three times.

Where is your mission as ambassador?

The mission that we are carrying out with Thibault Lanxade and Agnès Bricard was renewed in November by the Ministers of Economy and Labor. It is extended until the summer of 2024 and its scope is extended: we must promote all value-sharing tools, participation, profit-sharing but also the value-sharing bonus (PPV), and ensure that their good articulation.

Another novelty in relation to the various missions carried out since the Pacte law: the development of employee shareholding is explicitly mentioned.

Moreover, now that a national interprofessional agreement (ANI) has been concluded between employers and a majority of unions on this subject, we, ambassadors, are going to focus on company agreements. The forthcoming and faithful transcription of the agreement into law – promised by the government – makes less necessary the “branches” orientation which was an axis of our mission in 2020-2021, with a ripple effect which had proven limited, particularly in the context of a health crisis. Indeed, to date, less than 30 agreements have been concluded at this level.

The interprofessional agreement no longer speaks of the “employee dividend”. What do you think ?

This notion, based on an oxymoron, was very useful in bringing up the subject of value sharing. By comparing income from capital and income from work, it struck a chord. But it was also a source of confusion, even tension, between business leaders and employees.

What do you recommend that is not in the agreement?

I think we need to restore consistency between the different tools and provide more guidance to employers, who don’t know where to start and how to go about it, especially in SMEs.

In my opinion, it is necessary to designate participation (that is to say the redistribution of profits) as the reference tool for all companies with at least 11 employees – where the ANI limits itself to imposing at least a system for sharing value in these companies, even though participation is already compulsory in companies with more than 50 employees.

Profit-sharing should be refocused on an ecological ambition. Companies must be encouraged to link it to targets for reducing CO emissions2. We could test this system in 2024-2025 at least, perhaps with a tax incentive.

And for the value-sharing bonus, I propose that from next year, it can be placed on a company savings plan and not just paid in cash. This would be a way of aligning it with an objective of saving and financing the economy, instead of limiting it to a purchasing power objective.

Finally, it seems to me that all these tools should be components of an overall value-sharing agreement, concluded beforehand between the employer and the social partners in the company.

Don’t you think that companies with less than 11 employees should also be involved?

No, they are too different. The Value Sharing Bonus (VSP) tool is probably well suited to their situation, as it is very flexible. I also think that it is made for them, whereas it does not make much sense for other companies where it competes with both salary and employee savings.

The bonus has another shortcoming in medium and large companies: it is an instrument decided unilaterally by the employer. Employee savings are the subject of collective bargaining, which is very valuable for fueling qualitative social dialogue in companies.

Do you think the value sharing premium should eventually be eliminated?

The former “Macron bonus”, proposed as a response to the “yellow vests” crisis, was made permanent by the purchasing power law last summer. We will have to measure its effects of “cannibalization” to the detriment of profit-sharing and participation. In principle, its benefits in terms of tax exemption and desocialization end on December 31, 2023.

More structurally, do we really need four tools for sharing value (profit-sharing, participation, PPV, matching)? Rather than multiplying the instruments available to companies, I believe that we should concentrate on one key objective: to ensure that each company uses at least one of them and, as a priority, profit-sharing and participation.

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