Profit Sharing/Stock Options

This report provides a detailed examination of the benefits received by departing employees of a company converted to 100% employee ownership either as an ESOP or a Co-op over a 15 year period. It also studies the net cash retained by the ESOP or Co-op firm over the same time-span. It discusss the some theoretical and practical implications related to the two forms of employee ownership.

This case study disccuses the 1042 rollover of Select Machines and the employee purchase of the company from its retiring owners. It compares and contrasts the creation of ESOPs with that of cooperatives using the 1042 rollover provision and provides an overview of a co-op business succession model

This proposal examines the problem of economic disparity facing the United States, and presents an option for reform based on employee ownership and incentive-based compensation. It also proposes a change in tax policy accordingly and examines the impact of the proposal on a few Fortune 500 firms.

This article examines the role of ESOPs in transfering wealth to employees and the financial impact of ESOP legislation.

In the 28 years since Congress established Employee Stock Ownership Plans (ESOPs), over 10,000 U.S. companies have adopted and maintained ESOPs—dozens of studies have evaluated the effects of ESOP on company performance. After reviewing the research literature, Dr. Douglas Kruse concluded: “25 years of research shows that employee ownership often leads to higher-performing workplaces and better compensation and work lives for employees.” Study 1 (below) indicates that this “ownership effect” averages 2 to 3% per year on a variety of measures.

One key rationale for the creation of ESOP law in 1974 was to share wealth with the workers who helped create wealth. Today, many companies use the wealth sharing aspect of their ESOPs as an effective retention and recruitment tool. But just how effective a means of distributing wealth are ESOPs? Two studies, one conducted in Washington State and one in Massachusetts, have looked at the wealth consequences of ESOPs.