ESOPs Prove Profitable for Business

August 19, 2004 ( - Nearly nine out of 10 (88%) companies said creating employee ownership through an ESOP (employee stockownership plan) was "a good decision that has helped the company."

Asked to quantify how the presence of an ESOP improved business performance, 65% of survey respondents indicated a better performance in 2003 relative to 2002, and 12% said performance was nearly identical, according to the Employee Ownership Foundation’s 13 th Annual ESOP Economic Performance Survey.

Looking at other business measures, 70% of the survey sample indicated that revenue increased in 2003, compared to 30% indicating revenue did not increase. Additionally, 64% indicated that profitability increased, while 36% indicated that profitability did not increase.

“Time and time again, the results demonstrate creating employee-owned companies through ESOPs is good business,” said Foundation President, J. Michael Keeling. “Creating more ownership by employees should be national policy.”

The 2004 EPS was distributed to The ESOP Association’s approximately 1,300 company members in June 2004. The results are based on approximately 375 responses.