Company Value Sharing Bonus (PPVE)

La Prime de Partage de la Valorisation d'Entreprise (PPVE): a New Motivation and Reward Lever

With the recent introduction of the Company Value Sharing Bonus (PPVE), companies now have at their disposal an innovative tool to motivate and reward their employees , while aligning their interests with those of the company over a 3-year period. This scheme enables employees to benefit from a bonus, with tax advantages, based on the increase in the company's value, thus fostering greater commitment and collective performance.

Application decree of June 30, 2024: Link to the decree.

What is PPVE?

The PPVE is an exceptional bonus paid to employees, calculated according to the increase in the company's value over a defined three-year period. Its purpose is to involve employees in the company's economic performance, encouraging them to contribute actively to its growth and success.

This bonus is only paid if the valuation has increased within the 3 years of the plan and in proportion to the increase in valuation, an ideal tool for aligning all the company's employees in numerous scenarios:

• a company committed to an ambitious growth plan (start-ups, etc.);
• a turnaround company with major restructuring challenges;
• a company in the acquisition phase;
• etc...

Implementation procedures

Setting up a PPVE requires precise organization and formalization. Here are the key stages in setting up a PPVE:

1. Determining the Reference Period: The period over which the company's valuation will be calculated must be fixed. According to regulations, this period is set at three years. The initial valuation date and the final valuation date must be defined (usually the accounting closing date, but not necessarily).
2. Valuation method: The assessment of a company's value must be carried out rigorously, taking into account various economic and financial indicators. This assessment can be carried out by valuation experts such as XVAL. (Setting up a simple pedagogical support is an important lever for engaging all employees in the proposed plan).
3. Definition of Beneficiaries: Employees must have at least one year's seniority at the time of signing the PPVE agreement, unless a specific exemption is proposed by the manager.
4. Calculating the amount of the bonus: The amount of the bonus is proportional to the increase in the company's value over the reference period. Calculation methods must be transparent and clearly communicated to employees. You can vary the amount of the company value bonus according to the employee's salary, classification level or working hours.
5. Minimum length of service on the Bonus Payment Date: Employees must have been with the company for the whole of the reference period, i.e. three years.
6. Formalizing the agreement: The agreement can be formalized either through a unilateral decision by the employer, or through a collective agreement. This agreement must detail all the terms and conditions of the PPVE, including the eligibility criteria, the bonus calculation method and the reference period.

The text specifying the application of the law: Link to the decree.

Advantages of PPVE

For employees, the PPVE represents a unique opportunity to benefit directly from their company's economic performance. This strengthens their motivation and loyalty over the entire 3-year duration of the plan. For employers, it's an effective way of recognizing and rewarding employees' efforts without resorting to permanent pay rises, enabling better cost management.

What's more, the PPVE can become a lever of competitiveness and attractiveness for the company, by attracting talent willing to invest in a company offering prospects of gains linked to its performance.

Finally, setting up a Company Value Sharing Bonus raises awareness among all teams of a notion that is often little understood:the value of one's company , which often goes far beyond a simple increase in turnover and sales.

How can XVAL help you?

Setting up a CVPP may seem complex, but that's where XVAL comes in. As experts in company valuation, we're with you every step of the way. We help you accurately assess the value of your company, define the terms of the CVPP and formalize the agreement.

By calling on our expertise, you can be sure of setting up a system that is fair, transparent and beneficial to all stakeholders:

Summary of PPVE Application Constraints

Filing an agreement on TeleAccords: Documents to be supplied

• Signed version of the agreement.
• For a collective bargaining agreement :
  • Copy of the letter, e-mail, receipt or dated notice of receipt notifying the representative organizations of the text.
  • Minutes of voting results (in the case of group, company, establishment and inter-company agreements).
• For an agreement between employer and union representatives :
  • Indication that the representatives are union delegates or the text of the mandate empowering them to sign the agreement.
• For an agreement reached within the CSE :
  • Minutes of the meeting.
• For an agreement to be ratified by a 2/3 majority :
  • Employee sign-in sheet or consultation minutes.

Allocating the bonus to a PERE or PEE plan

• Possible savings plans :
  • Company savings plan (PEE) or inter-company savings plan (PEI).
  • Group company retirement savings plan (PERECO).
  • Mandatory company retirement savings plan (PERO).
• Deadline for employee assignment requests :
  • 15 days from receipt of the document informing you of the amount awarded.
• Tax exemption :
  • Bonus invested in part or in full exempt from income tax up to €1,738.8 in 2024 (5% of 75% of PASS).

Reference Amount and Modulation

• Separate pay slip :
  • Reference amount and modulation criteria.
  • Valuation rule and conditions for qualifying for the bonus after 3 years.
• Handing in the form :
  • By electronic means, unless the employee objects.

Amounts allocated in application of the PPVE

• Separate sheet for amounts allocated :
  • Reference amount and bonus amount.
  • Deduction for CSG and CRDS.
  • Possibility of allocating the bonus to a PEE, PERECO, PERO.
  • Deadline for requesting assignment (15 days).
• Handing in the form :
  • By electronic means, unless the employee objects.
• Appendix :
  • Note setting out the rules for calculating and adjusting the reference amount provided for in the PPVE.

Departure of an Employee After 3 Years and Before Bonus Payment

• Request current address :
  • Inform the ex-employee of his or her rights and request any changes of address.
• Provide the former employee with :
  • Record of sums allocated and calculation and modulation note.
• Disposal of sums :
  • Available for one year from the payment deadline.
  • After this period, the sums are returned to the Caisse des Dépôts et Consignations and can be claimed for 30 years.

Xval, a company valuation firm, can help you set up your Company Valuation Sharing Plan: