economie.gouv.fr,Qu’est-ce que le plan de partage de la valorisation de l’entreprise (PPVE) ?

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What is the Business Value Sharing Plan (PPVE)?

Definition

The Business Value Sharing Plan (PPVE) is a French government initiative implemented by the PACTE Law of May 22, 2019. It aims to encourage employee participation in the value creation and financial performance of their companies.

Objective

The PPVE’s primary objective is to:

  • Enhance employee motivation and engagement
  • Recognize employee contributions to company success
  • Promote a more equitable distribution of wealth

Mechanism

The PPVE allows companies to distribute a portion of their profits to employees in the form of shares or cash. This distribution is based on predefined performance criteria.

Criteria for Eligibility

Companies are eligible for the PPVE if they meet the following criteria:

  • Legal form: Joint stock company (SA), simplified joint stock company (SAS), or European company (SE)
  • Number of employees: At least 50 on December 31 of the preceding year
  • Registered office: In France

Implementation

To implement a PPVE, companies must:

  1. Set performance criteria and objectives
  2. Define the eligibility criteria for employee participation
  3. Determine the distribution formula
  4. Obtain the approval of the shareholders’ meeting
  5. Register the PPVE with the French tax authorities

Benefits

For Employees:

  • Financial rewards based on company performance
  • Increased sense of ownership and responsibility
  • Improved employee-employer relations

For Companies:

  • Enhanced employee motivation and productivity
  • Reduced turnover rates
  • Improved reputation and employer branding

Fiscal Incentives

The PPVE is subject to favorable tax treatment:

  • Distribution of shares: Exempt from social security contributions
  • Cash payments: Subject to a reduced social security contribution rate of 12.80%

Example

Consider a company with a turnover of €10 million and a profit of €1 million. The company decides to implement a PPVE with the following criteria:

  • Performance objective: Increase in turnover
  • Distribution formula: 10% of profits above the previous year’s turnover
  • Employees eligible: All employees with at least 6 months of seniority

If the company’s turnover increases to €11.5 million the following year, eligible employees will receive a share of the additional profit of €150,000, distributed according to their established criteria.

Conclusion

The Business Value Sharing Plan (PPVE) is a valuable tool for companies to engage and reward their employees, fostering a sense of ownership and promoting long-term success. By providing tax incentives and a clear framework for distribution, the PPVE encourages employee participation in the value creation process, leading to a more equitable and motivating work environment.

Qu’est-ce que le plan de partage de la valorisation de l’entreprise (PPVE) ?

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