A case study of an ESOP-owned holding company: lessons learned and suggested research topics

• Published in: Journal of participation and employee ownership (Online) Vol. 7; no. 3; pp. 229 - 240
• Main Author: Goldstein, Daniel
• Format: Journal Article
• Language: English
• Published: Bingley Emerald Group Publishing Limited 26.11.2024
• Subjects: Case studies; Cash flow; Diversification; Employee ownership; Employee stock ownership plans; ESOP; Leadership; Manufacturing; Private equity; United States > US; Iowa
• ISSN: 2514-7641; 2514-765X
• DOI: 10.1108/JPEO-11-2023-0011

PurposeThis case study presents an ESOP-owned holding company, Folience, describing the company’s history and holding company structure and strategy. The purpose is to highlight several advantages of the ESOP-owned holding company and concludes with lessons learned and suggestions for research.Design/methodology/approachThe case study design is descriptive and relies on proprietary knowledge and observation, along with access to documents, discussions, meetings and other primary resources and interactions.FindingsThe case study highlights several advantages of the ESOP-owned holding company structure: diversification, greater access to capital, transformation of culture, sustainability and the path to convert businesses to employee ownership. It draws lessons from observations and concludes with suggestions for additional research.Research limitations/implicationsThis is a single holding company case study, heavily reliant on participant observation by the author.Practical implicationsThis case study describes an innovative ESOP holding company whose design may be replicable.Social implicationsThe social impact is that ESOP-owned holding companies are shown to be a path for transitioning companies to being employee-owned and creating economic and cultural gains in doing so. The literature suggests that creating more employee-owned companies, and more employee owners, could have positive social and financial benefits for employees, their families and their communities.Originality/valueThis case study describes an innovative ESOP holding company whose design may be replicable. The social impact is that ESOP-owned holding companies are shown to be a path for transitioning companies to being employee-owned and creating economic and cultural gains in doing so. The literature suggests that creating more employee-owned companies, and more employee owners, could have positive social and financial benefits for employees, their families and their communities. There has been little or no focus, by case study or research, specific to the differentiation of and advantages of ESOP-owned holding companies.