According to the National Center for Employee Ownership, about 12,000 companies in the United States, employing 11-million Americans, have embraced Employee Stock Ownership Plans, commonly known as ESOPs, or other similar trust-based plans. The concept can motivate and reward employees, the NCEO noted on its website, and are used to take advantage of borrowing incentives in pretax dollars. In almost every case, ESOPs are a contribution to the employee, the NCEO said.
On June 2, 2014, Sen. Bernie Sanders, I-Vt., announced new legislation to encourage employee ownership. Through one bill, the U.S. Labor Dept. would provide funds to states to set up training and technical support centers to promote employee ownership and educate companies about the model, the office of Sen. Sanders said. Another bill would create a bank to provide loans to workers who want to purchase businesses through an ESOP or a worker-owned cooperative. A news release from the office of Sen. Sanders noted that Sen. Patrick Leahy, D-Vt. is a cosponsor of Sander’s legislative package.
The option of leaving the futures of companies in the hands of their staffs is commonly taken by business owners approaching retirement who want to see their firms continue under knowledgeable, existing teams.
Exploring options, learning more about the idea of employee ownership and understanding how it works, may be the right model for your company.