The Benefits of ESOPs and Employee Ownership to Employees
April 9, 2007

Last week I mentioned that we were going to discuss the benefits of ESOPs and employee ownership.  Effects of ESOP Adoption and Employee Ownership: Thirty Years of Research and Experience, a study commissioned by the Employee Ownership Foundation, summarized the effects of ESOPs and employee ownership as follows:

“Research suggests almost entirely positive effects for individuals of ESOP adoption and, more generally, employee ownership”

Here are some of the benefits of ESOPs and employee ownership to employees:

• HIGHER PAY – The average pay of employees of ESOP companies is at least as high, if not higher, than the pay of employees of non-ESOP companies.  This comparison does not include the value of the ESOP benefit.
• MORE BENEFITS - Employees of ESOP companies tend to receive more retirement benefits than employees of non-ESOP companies.  This comparison does not include the value of the ESOP benefit, which further increases the total benefits of ESOP employees.
• GREATER JOB SECURITY - Employees of ESOP companies have greater job security than employees of non-ESOP companies.
• GREATER JOB SATISFACTION – Employees of ESOP companies are more motivated and satisfied than their non-ESOP counterparts.

In addition to the findings in the above-mentioned study and the studies that can be found on the NCEO website, the ESOP Association’s ESOP Fact Sheet provides support for these benefits.