Despite Slow Economic Recovery, ESOPs Doing Well

The Employee Ownership Foundation’s 20th Annual Economic Performance Survey of Employee Stock Ownership Plan companies found that ESOPs have seen positive results over the past year. 

Ninety-two percent of survey respondents reported that creating employee ownership through an ESOP was “a good business decision that has helped the company.”  Nearly three-quarters of respondents (73%) indicated their ESOP positively affected overall productivity of employees.

Both profitability and revenue were up from previous years—68% reported profitability increased and 70% said revenue increased as well.  In terms of stock value, the majority of respondents (80%) stated the company’s stock value increased as determined by outside independent valuations, 17% of the respondents reported a decline in share value, and 3% reported no change.

“In looking at past results, it’s interesting to see performance numbers in a significant reverse of what was reported last year where so many U.S. corporations suffered financially,” said J. Michael Keeling, Employee Ownership Foundation President.  “It would be a shame if the Congressional bipartisan support for our modest national policy encouraging employee ownership was not enhanced as Congress looks for a ‘common’ ground policy encouraging U.S. based jobs.”

The survey asked companies to indicate their performance in 2010 relative to 2009. Sixty-eight percent indicated a better performance, 22% indicated a worse performance, and 11% indicated a nearly identical performance from the previous year. Fifty-eight percent of companies indicated they have created an ESOP education program or ESOP advisory committee since establishing the ESOP.

The 2011 Economic Performance Survey was distributed to more than 1,400 members of The ESOP Association in May 2011.  The results are based on 486 responses – a 35% response rate.

For additional information about the survey, visit The ESOP Association’s Web site at www.esopassociation.org