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ESOP Facts

 

Research on ESOP Company Performance and EPS Report Cover_Page_1
Rewards for Employee Owners

The latest insights on how ESOP companies performed last year—and how they shared what they earned with employee owners in retirement benefits and in salary increases to non-supervisory employee owners—is available in the report of the 2018 Economic Performance Survey
 


Wealth Inequality

  • A significant portion of ESOP companies offer above-average raises. A 2018 poll of ESOP Association members found that 75 percent of responding companies had increased wages to non-supervisory personnel the previous year by at least three percent; 29 increased pay the previous year by four percent of more. 
  • Multiple studies have found that ESOPs often offer higher wages and benefits than non-ESOP firms. (notes, p. 263, The Citizen’s Share)
  • Average account balances for employee owners at ESOP companies were nearly $200,000—much higher than data reported for average 401(k) account balances. (Source: The ESOP Company Survey, 2010, The ESOP Association.)
  • Many firms don’t offer employees a single retirement plan. Yet, according to the 2015 survey of ESOP Association members, 93.6 percent offer the ESOP companies polled offer a 401(k) and 2.6 percent offer a pension.​​
  • Greater ESOP participation may help address wealth inequality because capital income has risen faster than wage income. 

“By giving workers across the economic spectrum a share of profits and company stock, moreover, shared capitalism could perhaps play a role in mitigating the rising inequality in income and wealth that has characterized the United States since 1970s and 1980s. The reason is that capital income has risen more than wages, with labor’s share of national income falling in the 2000s, so that those with a share of business profits…have done better than wage earners.” (page 9, Shared Capitalism at Work, Kruse, Blasi, and Freeman)
 

ESOP Corporate Performance

  • S ESOPs outperformed the S&P 500 total return index in terms of total return per participant by 62 percent, from 2002 to 2012, according to a study by Ernst & Young. 
  • Sales per Employee, Part I. A study found “strong evidence that majority employee-owned businesses have a significant advantage over comparable traditionally-owned businesses in sales per employee.” The average advantage: $44,500. (Source: Employee Ownership and Participation Effects on Firm Outcomes, Brent Kramer, Ph.D.) 
  • Sales per Employee, Part II. ESOPs appear to increase sales, employment, and sales/employee by about 2.4 percent over what would have been anticipated, absent an ESOP. (Study by Professors Joseph Blasi and Douglas Kruse, Rutgers University.)
  • Revenue. 71 percent of ESOP Association Members responding to a poll saw their revenue increase in 2015 compared to 2014. Of those, 46 percent saw revenue increase by 11 percent or more. (Source: 2016 Economic Performance Survey)
  • Stock Price. 73 percent of ESOP Association Members responding to a poll saw their stock price increase in 2015 compared to the year before. Of those companies that saw an increase, 58 percent saw the stock price rise 11 percent or more, 30 percent saw the price rise 21 percent or more. (Source: 2016 Economic Performance Survey)
  • Sales and Survivability. ESOPs are linked to higher sales growth per worker, higher sales per worker, and greater likelihood to survive than conventionally-owned firms. (Firm Survival, Performance, and Employee Ownership: Comparing Privately Held ESOP and non-ESOP Firms, 2013, Joseph Blasi, Doug Kruse, Daniel Weltmann)

For media inquiries, please contact:

Patrick Mirza   Paul Pflieger 
Communications Director
    Associate Communications Director
Patrick@esopassociation.org     Paul@esopassociation.org
(202) 293-2971   (202) 293-2971

 

 


EPS Report Cover_Page_1

 

EPS Report Cover_Page_1

 

EPS Report Cover_Page_1