Employee Ownership Foundation
 
 
 

Charting Your Own Future

"We understand that a well managed employee-owned company is not a destination, it is a journey..."

- J. Michael Keeling,
President of The ESOP Association

 
 

Research Summary

Research funded by the Employee Ownership Foundation provides overwhelming evidence that ESOP companies are generally more productive, more profitable, and provide more sustainable employment.

  • During the Great Recession, employee stock owned companies laid off employees at a rate of less than 3%, whereas conventionally owned companies laid off at a rate greater than 12%. (Data source: 2010 General Social Survey.)
  • Because employees of ESOP companies were four times more likely to retain jobs during the Great Recession, Federal government recognized savings of over $14 billion in 2010 compared to tax payments foregone by laid off employees of conventionally owned companies; in other words for every $1 in tax expenditures to promote employee stock ownership, the Federal government collected $13 in taxes. (Data Source: 2010 General Social Survey analyzed by National Center for Employee Ownership.)
  • A survey of 1,600 ESOP companies in 2015 evidenced the average age of the companies’ ESOPs was 16 years, and the average account balances for employees were nearly $200,000, much higher than data reported for average 401(k) account balances. (The ESOP Company Survey, 2010, of The ESOP Association’s Corporate members.)
  • According to 2014 General Social Survey, 13% of employees of employee stock-owned companies were thinking of seeking employment elsewhere, whereas 24% of the employees of conventionally-owned companies were considering leaving their current job.
  • In the summer of 2015, the Employee Ownership Foundation released results from the 24th Annual Economic Performance Survey (EPS) of ESOP companies. Since the Employee Ownership Foundation’s annual economic survey began 24 years ago, a very high percentage, 93% of survey respondents, have consistently agreed that creating employee ownership through an ESOP was “a good business decision that has helped the company.” It should be noted that this figure has been over 85% for the last 15 years the survey has been conducted. In addition, 77% of respondents indicated the ESOP positively affected the overall productivity of the employee owners. In terms of revenue and profitability --- 78% of respondents noted that revenue increased and 69% of respondents reported that profitability increased. In terms of stock value, the majority of respondents, 83%, stated the company’s stock value increased as determined by outside independent valuations; 14% of the respondents reported a decline in share value; 4% reported no change. The survey also asked respondents what year the ESOP was established. Among those responding to this survey, the average age of the ESOP was 17 years with the average year for establishment being 1998.
  • More than half of the ESOP companies have two retirement savings plan (primarily a 401(k)), whereas more than half of all companies have no retirement income savings plan. (Analysis of forms 5500, and Bureau of Labor Statistics by the National Center for Employee Ownership, funded by the Employee Ownership Foundation.)
  • The average ESOP company (less than 200 employees) has sales $9 million more per year than its non-employee owned comparable competition. (June 2008 Dissertation, Dr. Brent Kramer, CUNY.)
  • A study of 1100 ESOP companies over eleven years compared to 1100 comparable conventional owned companies evidenced the 1100 ESOP companies had better sales, more employment, and were more likely over the period to remain independent businesses by 16%. (Most detailed study of ESOP companies by Dr. Joseph Blasi, and Dr. Douglas Kruse, tenured professors, Rutgers University School of Labor and Management, 1999.)
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