ESOPs Are Good For Business

August 31, 2005 ( - An annual survey from the Employee Ownership Foundation shows that a company's decision to become employee owned via an Employee Stock Ownership Plan (ESOP) relates to greater company performance and greater wealth creation for company owners.

In its press release on the 14 th annual ESOP Economic Performance Survey, the   Foundation said that 87.5% of survey respondents said creating employee ownership through an ESOP was “a good business decision that has helped the company.”

The survey was distributed to The ESOP Association’s 1,400 members and generated 400 responses.   Findings of the survey include:

  • 74% indicated a better performance in 2004 than 2003,
  • 9% indicated nearly identical performance in 2004 and 2003,
  • 17% indicated a worse performance in 2004 than 2003,
  • 84% indicated that revenue increased,
  • 74% indicated that profitability increased,
  • 51% have created an employee participation program since establishing their ESOP, and
  • Over 60% indicated that their ESOP improved the overall productivity of employees.

“These results consistently demonstrate that employee ownership through an ESOP is good business,” said J. Michael Keeling, President of the Employee Ownership Foundation, in the release.