Another 13% are considering it, according to a recent Grant Thornton Business Owners Council survey.
As a concept, 55% of the business owners support the notion of sharing ownership of the company with their employees. Another 16% would rather not ? but believe it is necessary to attract and keep valuable employees. However, more than a quarter (26%) don’t support the concept of sharing ownership.
“Owners tend to believe that if employees receive stock options, they will begin to feel and act like owners,” says Jill Osborn, managing partner of compensation and benefits consulting at Grant Thornton. “In reality, employees often cash in stock options as soon as they can because they view stock options as a means to accumulate cash, not invest in a company. To create a true ownership mentality, companies need to set clear strategies, then communicate and reward employees based on those objectives.”
The survey found significant differences in option availability between industries. For example, nearly three-fourths (73%) of Internet companies still offer stock options, compared with:
- 61% of technology companies
- 41% of community banks
- 36% of consumer and industrial products companies and
- 30% of all other companies.
According to the survey, owners who support sharing ownership are more optimistic about the future growth of their companies than those who do not by a margin of 43% to 24%.
However, the survey found no significant difference in the rate of turnover and company profitability between those that offer stock and other companies.
The survey of 417 business owners and senior executives of companies with annual sales between $5 million and $500 million ($100 million and $2 billion in assets in the case of financial services organizations) was conducted by Grant Thornton LLP, an accounting, tax and management consulting firm.