Leaders of ESOP Companies Still Support Employee Ownership

September 13, 2010 (PLANSPONSOR.com) - Even though ESOPs were not immune to impacts of the recent recession, leaders of ESOP companies still feel strongly that their company is better off than their non-ESOP counterparts, according to a new survey.

Results from the Employee Ownership Foundation’s 19th Annual Economic Performance Survey of ESOP (employee stock ownership plan) companies that are members of The ESOP Association, 91% of survey respondents reported that creating employee ownership through an ESOP was “a good business decision that has helped the company.” In addition, 63% of respondents indicated the ESOP positively affected the overall productivity of the employees.    

Six in ten companies (61%) indicated they have created an ESOP education program or ESOP advisory committee since establishing their ESOP.   

According to a press release, in terms of profitability and revenue, as expected, both were down from previous years — 63% of respondents reported that profitability decreased and 71% of respondents noted that revenue decreased.  On the other hand, for a majority of respondents (59%), the company’s stock value increased as determined by outside independent valuations, 37% of the respondents reported a decline in share value, and 4% reported no change.  Of those who did report a deceased share value, 87.3% reported the decline was less than 30% from prior years.  

One third (33.5%) of respondents indicated a better performance in 2009 than in 2008; 54.3% indicated a worse performance; and 12.2% indicated a nearly identical performance. Twenty-nine percent indicated revenue increased; 71% indicated revenue decreased. Thirty-seven percent indicated profitability increased; 63% indicated profitability decreased.  

The 2010 Economic Performance Survey results are based on 418 responses.     

For additional information about the survey, visit http://www.esopassociation.org.