The State of ESOPs: what’s past is Prologue[1]

• Published in: Journal of participation and employee ownership (Online) Vol. 2; no. 3; pp. 177 - 182
• Main Authors: Blasi, Joseph, Weltmann, Dan, Kruse, Douglas
• Format: Journal Article
• Language: English
• Published: Bingley Emerald Group Publishing Limited 05.12.2019
• Subjects: Baby boomers; Democracy; Economic development; Employee ownership; Employee stock ownership plans; Employment; ESOP; Manufacturing; Securities markets; Startups; Technical services; Workers; United States > US
• ISSN: 2514-7641; 2514-765X
• DOI: 10.1108/JPEO-12-2019-026

The State of ESOPs: what’s past is Prologue[1] The major version of majority to 100 percent employee ownership in the US is the Employee Stock Ownership Plans (ESOP). [...]503 stock market companies haves 8.5m ESOP workers with $1,070bn in value and an average employee ownership estate of about $107,000 per employee participant. According to the Rutgers data, there are only 200 new closely held ESOPs a year. [...]internal growth rather than new ESOP companies explains the large expansion of ESOP assets in the US on the one hand, this has built a durable employee share ownership sector in the American economy that is serving as a magnet for both research and policy. On one hand, the small number of worker cooperatives may be due to a historic focus on riskier start-ups than conversion of existing businesses, a lack of credit to buy very expensive companies, the dependency on worker savings to start-up, the fact that transactions for worker cooperatives (unlike for ESOPs) have traditionally not been done by major investment banks and law firms and business advisors, and, perhaps, inexperience among many workers with the direct democracy management model of worker cooperatives.