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Employee Ownership: It's Good for Business – and for the Soul

Excerpt: Study after study has confirmed the fact that employee ownership helps companies be more productive, more competitive, and more profitable. In short, employee ownership is good for business. And that's a great thing. But there is something more that is at work in employee ownership companies. In the way they operate, and by their very nature, these companies tap into the universal human hunger for meaning, for the pursuit of a higher purpose – one that transcends the drive for personal benefit. These companies generate outsized returns not only for the pocketbook, but for the soul.

Getting Some Estate Planning Help from Your Employees, and the Government, with an ESOP

ESOPs and the Law of Unintended Results

Excerpt: [P]erhaps 75 percent of all outcomes are unintended. And, more important, an unintended result is far more likely to be negative than positive. And, even more important, that the negative effect of an unintended result will be greater by a significant factor than the positive effect of a planned one.

Overview of the Pension Protection Act of 2006

Excerpt: This article summarizes the key PPA changes affecting ESOPs and the use of employer securities in qualified benefit plans.

Prevalence, Characteristics and Employee Views of Financial Participation in Enterprises

Excerpt: The past several decades have seen a dramatic increase in direct employee participation in the financial performance of private companies. From profit sharing, gain sharing and bonuses to a variety of employee ownership plans and broad-based stock options, employees in U.S. companies are increasingly receiving part of their compensation in performance-based 'shared capitalism' plans.

Study Finds Employee Ownership Improves Performance of Newly Privatized Businesses

Excerpt: The authors' conclusion? Privatization per se is not a 'magic bullet.' Where profits and sales efficiency increased for privatized firms, it was due in large part 'to successful training and development programs that were implemented and because employees and managers were urged to gain a more vested interest after gaining options to buy shares in their enterprises.'

Lessons Learned in Conducting Employee Ownership Practices

Excerpt: Perhaps the most important lesson I've learned in my practice is that, correctly done, employee ownership is one of the very few situations in life that can actually be a win-win situation (or, more correctly a situation with the same number of wins as parties involved).

Employee Ownership: What Every Professional Service Adviser Ought to Know

Excerpt: For professionals who advise business leaders – accountants, lawyers, bankers, financial advisors and general business consultants – this represents an opportunity to practice their craft (and generate income) by offering accurate, informed guidance. Conversely, professional advisors who remain poorly informed about employee ownership are likely to lose clients who are looking for direction on this topic. So, without becoming full-fledged experts, what are the basics that professionals should know about employee ownership in order to provide sound guidance and good direction to their clients?

What Does the Economic Downturn Mean for Employee-Owned Companies?

Excerpt: For most companies, this won't be an easy time. There will be pain. In these difficult conditions, leaders must strike the right balance between involving employees in determining how to go forward, and taking responsibility for some of the hard decisions. Where sales levels will simply no longer support the existing payroll, for example, something will have to be done. Leaders should solicit ideas and preferences from the employee-owners as to what exactly should be done to deal with that reality. People may be open to cutting salaries for all in lieu of laying off some - or individuals may volunteer to reduce their hours to a part time role. At some employee-owned companies, young single employees have even volunteered for layoff where necessary to keep a family breadwinner on the payroll. All such creative measures should be considered. Still, there will be circumstances in which hard decisions - even unpopular ones - will be required. Employees may be uncomfortable with the notion of suggesting that colleagues should lose their jobs. Final decisions, therefore, must be the responsibility of management, who may sometimes best serve the company by being the 'bad guy.'