Handelsbanken batthing its workers with money as Oktogonen gets even richer
Wednesday, 10 April 2013
Handelsbanken's strong stock market performance and rising dividends
has significantly inflated the value of the banks employees'
profit-sharing portfolio. This has meant that its workers as said
to be awash with money.
According to Swedish business daily, Dagens Industri, Handelsbanken
profit-sharing scheme, or roughly translated as profit sharing
foundation, Oktogonen has seen its portfolio value for the first time
reached over Skr20 billion. At year-end, its value stood at over Skr16
billion, and in last December 2011, the market value was over Skr12
The portfolio consists of 90 percent of the Class A shares in
Handelsbanken. In March the shares traded to record levels, around
Skr290 billion, up 25 percent from year-end, writes the paper, Dagens
Handelsbanken puts the shares profit back to Oktogonen each year
when the bank reach specific targets for return on equity.
In 2012 the Foundation was made more money than ever, Skr1.02 billion.
It was a result of the Bank raising its dividend provision to Oktogonen
which may not exceed 15 percent of the dividend to shareholders.
Approximately 22,000 current and former employees at Handelsbanken are
taking part in Oktogonen. From the age of 60 they have the right to
request their share of the money. The percentage depends on the length
of employment at the bank.
The maximum amount of Skr14 million assumes that the person worked full
time at Handelsbanken since 1972, but no such employee exists,
according to Oktogonens Chairman, Tommy Bylund speaking to Dagens
To throw more light on the scheme, Octogonen is a foundation for
profit-sharing within Handelsbanken. It has been in operation for over
30 years, longer than any comparable system in Sweden. The system is a
combination of profit-sharing and collective employee ownership.
Handelsbanken says that the system stands out as an important pillar in
a company aiming at a long-term and trustful relationship with its
employees. The fact that the individual cannot access the shared profit
before the age of 60 gives it the character of a pension system.
by Scancomark.com Team
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