The economics and finance of dividend-based labour remuneration and tradable shares in worker cooperatives

This paper examines the implications of implementing a comprehensive dividend-based remuneration system for members of worker cooperatives, which could be uniquely linked to the financial position of worker-members as owners of the cooperative’s capital. The alignment of interests between worker members and non-member financial investors is considered a necessary condition for the creation of a cooperative share market. Decoupling the financial ownership of members and non-members from control rights would safeguard the formal and substantive role of the democratic ‘one member, one vote’ principle in mutual aid enterprises from influences arising from share ownership. Various issues relating to the issuance and ownership of cooperative shares are discussed, including their impact on the economic and financial well-being of members, allocation rules, distributive issues, the payment of dividends, as well as the degeneration of the cooperative form of enterprise in the presence of tradable shares.