About EO and the EOF

About Employee Ownership Foundation

The Employee Ownership Foundation is a recognized 501(c)(3) organization supported by grants and tax-deductible donations as well as the volunteer efforts of dozens of individuals throughout the nation. Since its founding in 1991, the Employee Ownership Foundation has operated in pursuit of a single overarching goal: to help more individuals become employee owners.

The EOF is dedicated to the promotion of employee ownership as a model for business, education, and research. Each year, the EOF distributes between $350,000 and $500,000 in advancement of its mission.

The Foundation has raised and donated millions of dollars to collect data used by academics, encourage objective research, and to facilitate dialogue about employee ownership between thought leaders.

To learn more visit www.employeeownershipfoundation.org

Employee Ownership Facts

There are a variety of ways to enable employees to become owners in the businesses where they work.

As one might expect, these options have pros and cons that make them better suited to some situations than others. Some of the most common forms of employee ownership are:

  • Employee stock ownership plans (ESOPs)
  • Worker cooperatives
  • Employee stock options (ESOs)
  • Employee stock purchase plans (ESPPs)

By far the most popular and successful model of employee ownership in the US is the Employee Stock Ownership Plan or ESOP. As the 501(c)3 affiliate of The ESOP Association, this is where the EOF focuses a majority of its efforts.

In the simplest terms, an ESOP is a retirement plan. In reality, an ESOP is so much more than that. ESOPs provide unique benefits to the employee owners, the institutions, and the surrounding communities that they are involved with. When ESOPs are formed, for example, shares of company stock are allocated to all employees, making them employee owners who share in the rewards if the stock rises and the risks if the stock falls. As a result, they are more invested in helping the business succeed and more likely to tackle problems, such as helping co-workers who are underperforming.

Facts and Figures about ESOPs

  • There are around 7,000 ESOP companies.
  • There are more than 10.568 million Employee Owners in the United States (that’s more than the entire auto industry)
  • The top industries with ESOPs are manufacturing, science, technology, finance, insurance, real estate, and retail.
  • ESOPs require no out-of-pocket contribution from employees. For plenty of people, funding a contribution to a 401(k) each paycheck is a struggle. For employees like these, an ESOP might be the only retirement plan in which they can afford to participate.
  • ESOPs help narrow the wealth inequality gap. Employees at ESOP companies tend to earn higher wages and have greater savings than their peers in non-ESOP companies. In 2018, ESOPs distributed $126.7 Billion nationally.

ESOPs have been proven to: