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Stock options could benefit UAE companies

Employee-owned businesses show great resilience, according to a recent report

• By Aya Lowe, Staff Reporter


• Published: 00:00 September 7, 2010


• 

• While EOB’s have proven
  to be resilient during the
  downturn, the number of
  business in the Middle East
  offering this business model
  are much less common
  compared to the UK or US
  due to the local ownership
  regulations.


• Image Credit: Gulf News

Dubai: Giving employees a share of the
business through stock options are an important incentive for staff and
increases the resilience of a company during an economic downturn,
according to a recent report by Cass Business School, in London.

However, this staff incentive is not easily available in the UAE.
While EOB's have proven to be resilient during the downturn, the number
of business in the Middle East offering this business model are much
less common compared to the UK or US due to the local ownership
regulations. In most cases, stock options for employees are simply
absent.

"The set up in the UAE is not very conducive to employee-owned
companies as our law here does not support stock options. It's not easy
to build mutli-levels of shares and it makes it difficult for people to
use share holding as a form of incentive for employees," Prashant
Gulati, the secretary general of the Indian Business and Professionals
Council in Dubai, told Gulf News.

Part ownership

An EOB is a business that is owned in whole or partly by its
employees. Employees are often given a share of the business after
working with the company for a certain period. If local continued...