Do Employee Share Owners Face Too Much Financial Risk?

• Published in: Industrial & labor relations review Vol. 75; no. 3; pp. 716 - 740
• Main Authors: Kruse, Douglas, Blasi, Joseph, Weltmann, Dan, Kang, Saehee, Kim, Jung Ook, Castellano, William
• Format: Journal Article
• Language: English
• Published: Los Angeles, CA SAGE Publications 01.05.2022; SAGE PUBLICATIONS, INC
• Subjects: Diversification; Employees; Families & family life; Owners; Ownership; Portfolios; Risk; Risk reduction; Tolerance; Wealth; benefits; pay incentives; risk compensation; performance pay; pay practices

A major theoretical objection against employee share ownership is that workers are exposed to excessive financial risk. Theory posits that 10 to 15% of a typical worker’s wealth portfolio can be prudently invested in employer stock. The authors analyze employee share ownership in US family portfolio...