After a long period of public commentary, the Danish Parliament on Dec. 19, 2025 passed a law about employee cooperative corporations that was alleged to be a Danish version of the UK’s Employee Ownership Trusts (EOTs). But the law left out the most crucial part of the mechanism for Employee Stock Ownership Plans (ESOPs) in the US, EOTs in the UK, and the Coop-ESOP in Slovenia, namely a (tax-benefited) cash contribution from the company to the ESOP or EOT to pay off the debt incurred to acquire the shares of the company. The Danish law only provides for dividends on the shares to pay off the shares–which is more or less financially impossible since the market valuation of the shares (required by the law) is in theory the present value of all future dividends. Why would anyone sell their shares in return for a few years of dividends when they could keep the shares and still get those dividends plus all the future dividends (and the votes attached to the shares)? In short, the Danish EOT is an unworkable model for employee ownership as a solution for the growing problem of business succession. The problems with the model are analyzed in more detail in the paper that can be downloaded below.
Click here to download the analysis and commentary on the Danish EOT Law.