As movement to scale wealth-building opportunities for American workers gains momentum
WASHINGTON – The Expanding ESOPs coalition announced Wednesday it has grown to more than 100 members, as the movement launched less than two years ago to supercharge the adoption of employee stock ownership plans (ESOPs) and build wealth for hard-working Americans gains momentum.
Expanding ESOPs unites for the first time a broad coalition of employee-owned companies, major foundations, financial institutions, advisory and law firms and advocacy groups to work together to bring the benefits of ESOPs to more workers and companies.
“Expanding ESOPs members are united in their belief that by growing employee ownership, we can build a more sustainable economy based on shared prosperity,” said Daniel Massey, head of communications and strategy for Expanding ESOPs. “We’re building a broad coalition—now 100 strong—to unlock the untapped potential of ESOPs to create more wealth for workers and stronger American companies.”
The 100-member milestone comes on the heels of Expanding ESOPs’ announcement that it hired veteran Capitol Hill retirement policy expert Michael Sinacore to lead its efforts to pass legislation designed to give more frontline workers stakes in the companies they help build.
Sinacore, who worked for former Sen. Rob Portman, and played a key role winning bipartisan support for the SECURE 2.0 Act, is steering the coalition’s work to build enthusiasm on both sides of the aisle for forthcoming legislation making it easier for workers at public and large private companies to reap the benefits of employee stock ownership plans, or ESOPs.
Founded in 2024, Expanding ESOPs is working to scale the use of ESOPs— a powerful, but underused, means of providing front-line workers with the benefits of employee stock ownership. ESOPs provide tax incentives to extend ownership opportunities throughout a company, allowing workers to share in the wealth they help create. Worker ownership often results in greater worker retention, engagement and productivity for companies.
‘An incredible wealth creation tool’
ESOPs were formally incorporated into federal law through the Employee Retirement Income Security Act in 1974, and decades of academic research have demonstrated their effectiveness as a wealth-creation tool for workers.
At the same time, prevailing ESOP structures can have limited applicability. While ESOPs can own any percentage of a company, private-company ESOPs are commonly structured as 100% employee-owned. In those transactions, there is typically no outside investor providing equity capital; instead, the purchase must be financed through company resources, borrowing and, often, the selling shareholder. That can make a 100% ESOP impractical for owners seeking greater liquidity at exit, companies that cannot support the additional leverage, or where an outright sale is not desired or feasible.
Partial ESOPs, where the ownership percentage is lower, have broader potential applicability, but have been in decline due to statutory and regulatory complexity, litigation risk, and inconsistent tax incentives. Making it easier to form partial ESOPs will make the model more appealing to more businesses and ultimately will increase the ownership opportunity for more workers.
“Reaching 100 members sends a clear message: businesses want practical ways to share ownership with their workers,” said Pete Stavros, founder and chairman of Expanding ESOPs. “The traditional 100% employee-owned ESOP model is powerful, and we should continue doing everything we can to support it. But it is not the right fit for every company. By making partial ESOPs easier to establish and scale, we can extend employee ownership to far more workers and create a path to trillions of dollars of wealth for frontline employees.”
As it crossed the 100-member mark, Expanding ESOPs unveiled a redesigned website to educate the public and policymakers about ESOPs and highlight how workers and companies alike benefit when everyone has an opportunity to own a stake in their company.
Facts on ESOPs
- There are fewer than 6,500 ESOP companies today — less than 1% of companies in America
- ESOPs are effective, but there are less than 300 new ones formed each year, with a roughly equal number disbanding
- The vast majority (71%) of new ESOPs have fewer than 100 employees
- Approximately three quarters of new ESOPs are in the industrial and service industries – leaving behind huge swaths of workers in technology, financial services and media
‘A team sport’
The movement to grow employee ownership is gaining momentum as working Americans are struggling. The share of economic output going to labor just hit an all-time low, while most Americans have little or nothing saved for retirement. At the same time, they have largely missed out on the extraordinary wealth creation taking place in the equity markets: the bottom 50% of households hold only about 1% of the country’s equities. Since 1980, the S&P 500 has skyrocketed by nearly 20,000%, far outpacing gains in real estate or real wages — and this divergence is accelerating.
“Without access to equity ownership, the vast majority of our fellow citizens are going to fall further behind,” said Mary Josephs, an Expanding ESOPs board member and founder and CEO of Verit Advisors. “ESOPs turn capitalism into a team sport and help build worker wealth, stronger companies and more vibrant communities.”
What New Coalition Members Are Saying About Joining Expanding ESOPs
Cecilia Loftus, Managing Director, Head of ESOP Banking Services, Citizens Commercial Banking: “Citizens supports Expanding ESOPs and its mission to bring employee ownership to more workers. Employee ownership has demonstrated its value for many companies, but it remains available to only a small number of workers. By bringing leaders together and raising awareness, this movement is helping more business owners see employee ownership as a powerful path for succession and long-term success.”
Cassandra Sanford, CEO, KellyMitchell: “At KellyMitchell, employee ownership reflects our belief that when employees have a stake in the company’s success, everyone benefits! We’re proud to be part of the Expanding ESOPs coalition and support a growing movement that creates opportunities for employees to build wealth, contribute meaningfully, and share in long-term growth. Reaching 100 coalition members is an exciting milestone and a testament to the growing recognition that employee ownership is a powerful path to shared success.”
David Solomon, Executive Committee Member, Partner, & Founder of ESOP Services Practice, Levenfeld Pearlstein: “Levenfeld Pearlstein is thrilled to join the coalition as it celebrates 100 members. This milestone reflects the growing momentum behind broad-based employee ownership and its power to create lasting value for both workers and businesses.”
Trevyr Meade, Co-founder, Managing Partner, ownAI: “We created ownAI because we believe ESOPs provide an ideal structure for ensuring that the productivity gains from AI create wealth for workers. The coalition’s initiative to make that opportunity available to many more people couldn’t be more important, and we’re excited to be part of it.”
Expanding ESOPs coalition members include: 3LS, 40 Million Owners, Aegis Trust Company, Alabama Center for Employee Ownership, All Hands Partners, Apis & Heritage Capital Partners, ArentFox Schiff, Argent Trust, The Aspen Institute Employee Opportunities Program, AVID Products, BDO, Berman Hopkins, Bipartisan Policy Center, Blank Rome, Blue Ridge, BMO, Brubaker, Bryan Cave Leighton Paisner, Butcher Joseph & Co., Central States, Certified Employee-Owned, Chartwell, Christensen Group Insurance, Citizens Bank, Conscious Capitalism, CoRise Capital, Deloitte, The Democracy Collaborative, Devine Millimet, Empire Valuation Consultants, Empowered Ventures, EOX, ESOP Law Group, ESOP One, EY, Faegre Drinker, Ford Foundation, Go ESOP LLC, GreatBanc Trust Company, HB Global, HDH Advisors, Holland & Hart, Holland & Knight, Houlihan Lokey, ITA Group, J.P. Morgan, Katten, KDV, KellyMitchell, Khorsand ESOP Advisory, Kirkland & Ellis, Kleinbard LLC, Kroll, Levenfeld Pearlstein, Loop Capital, McDermott Will & Emery, Menke, Mitchell Martin, Monarch, Morgan Lewis, MyPath, N&G Legal Group, Newport Trust Company, LLC, North Carolina Employee Ownership Center, North River Boats/Willie Boats, Omidyar Network, ownAI, PNC, Polsinelli, Praxis, Predistribution Initiative, Principal, Project Equity, Prudent Fiduciary Services, Prudential Financial, RBC Wealth Management, Ropes & Gray, RSM, SES ESOP Strategies, Sheppard Mullin, Shoemaker Consulting, Southeast Acquisition Capital, Spinnaker Trust, State Street Investment Management, Sterling Engineering, StoneAge Holdings, Stonehaven Trust Company, Stout, Summit Fiduciary Group, The Aspen Institute, Thompson Hine, TI-TRUST, Torana Group, UBS, Vedder Price, Ventura Trust, Verit Advisors, Web Industries, Wells Fargo, Workforce and Organizational Research Center, WorkMoney and Zolidar.