The Opportunity

Let's extend the benefits of ESOPs to all.

While Employee Stock Ownership Plans (ESOPs) have been an incredible wealth creation tool for workers who have been able to participate, we simply don’t have enough ESOPs.

Today, there are just 250 new ESOPs formed each year. This represents only ~1% of the 25,000 companies that are bought/sold every year in the US. And while some of these ESOPs have hundreds or even thousands of workers, 71% of new ESOPs have fewer than 100 employees. And lastly, about three quarters of new ESOPs are contained to the industrial and service industries – so we are largely missing sectors of the economy like technology, financials and media.

There is a massive and untapped opportunity to dramatically expand the number of ESOPs formed each year, particularly among larger companies and in sectors of the economy where we currently see little ESOP activity.

Just imagine: How different would our economy—and our country—be if workers owned a slice of every company in America?

Source: National Center for Employee Ownership, Data from 2016-2021

OUR VISION FOR ESOPs

ESOPs must work for companies large and small.

Our vision is to dramatically increase annual ESOP formations. That, combined with the inclusion of much larger and more rapidly growing companies, has the potential to transform the wealth profile of the bottom 50% of Americans. Imagine if workers owned 10% of every company in the country through an ESOP. With an estimated aggregate value of all corporate equities of $75 trillion, this would imply $7.5 trillion of wealth creation potential for working Americans. Even with only partial adoption, the impact would be enormous.

But to drive such a change, we need to revisit the original ESOP structure. Given they were first created over 50 years ago, it should come as no surprise that the creators did not reflect the many changes that have occurred in our economy and our capital markets (as context, our economy was $1.6 trillion in 1974 and is $28 trillion today).

We need to supplement the current 100% S-Corp ESOP model, which appeals mostly to smaller businesses with limited numbers of shareholders, with a complementary and equally viable partial C-Corp ESOP structure that will work for many more companies, especially ones of a larger scale.

EXPLORE ESOPs

Dig into the ESOP story.

On this site you will find information about the original ESOP legislation as well as the “core principals” of what would need to be addressed in order to meaningfully inflect the role that ESOPs can play in our economy. You’ll also find background on our organization, Expanding ESOPs, and the rationale behind our desire to substantially broaden employee ownership – and, of course, how ESOPs can help.

We have tried to simplify the more technical aspects of the law to be more approachable for those who are new to ESOPs, while remaining detailed enough to be helpful to policy makers. Throughout, we have used simplifying language to make some of the concepts more easily understood.

We hope you find the information useful and, most importantly, we hope you feel compelled to get involved.