Reports

John Zogby Strategies Survey Finds Employee-Owners Are More Optimistic About Their Economic Positions Than Other U.S. Workers

An April 2017 survey conducted by John Zogby Strategies and commissioned by ESCA finds employee-owners are more than twice as likely to believe their personal financial outlook has improved compared to their peers at non-ESOP companies. Additionally, employee-owners feel better prepared to address major life expenses such as car payments, mortgages, college costs, and retirement savings, and have more confidence that they can handle surprise costs such as unexpected medical bills. According to John Zogby, “employee-owners see and feel the benefits of their ownership interests, and that makes them far more confident in their jobs and financial futures than the rest of us.” Click here to read the full study.

Matrix Global Advisor CEO Alex Brill Finds S ESOPs Create Jobs Faster Than Private Sector As A Whole, But Represent Only A Small Fraction Of Business Exits

In March 2017, research by Matrix Global Advisors CEO Alex Brill found that S ESOP job growth exceeded that of the private sector as a whole since 2002. Yet, the study also finds that S ESOPs make up only a fraction of current U.S. business transitions, despite offering unique benefits including greater firm longevity, higher wages for workers, and better job security. Brill concludes that “it would be a positive development if more private business owners choose this exit strategy when it is a viable one for them and their company and if policies to promote wider adoption of S ESOPs were pursued.” Click here to read the full study.

National Center For Employee Ownership Study Shows How States Can Promote ESOP Growth

Data compiled by the National Center for Employee Ownership (NCEO) reveals nearly 7,000 ESOPs employ more than 13.5 million people and own more than $1.1 trillion assets in the United States. To expand the benefits of employee ownership to more Americans, the study suggests state governments can create an Office of Employee Ownership, develop specialized loan incentives for ESOP businesses, and enact tax abatement programs for employee-owned companies, among other initiatives. Click here to read the full study.

Jared Bernstein Finds Finds Employee Stock Ownership Plans Reduce Inequality in Wealth and Wages  

Jared Bernstein, former chief economist for Vice President Joe Biden, finds that by increasing capital ownership, employee stock ownership plans (ESOPs) reduce wealth inequality, and, if plans were to proliferate, more workers across the country would benefit from the equalizing effects of ESOPs. Commissioned by the Employee-Owned S Corporations of America (ESCA), Bernstein’s report also finds that ESOPs do not have the effect of trading employee wages for ownership shares. In fact, the report argues that as employee ownership rises, wage inequality also falls. Click here to read the full study.

Ernst & Young Study Finds S ESOPs Total Return Beats S&P 500 by 62%

New data compiled by EY’s Quantitative Economics and Statistics (QUEST) practice, shows that private employee stock ownership retirement plans (S corporation ESOPs) outperformed the S&P 500 Total Returns Index in terms of total return per participant by an impressively large margin (62%), net assets increased over 300%, and distributions to participants totaled nearly $30 billion from 2002 to 2012. Click here to read the full study.

National Center for Employee Ownership Study Finds that ESOPs Have Strikingly Fewer Loan Defaults

New data compiled by the National Center for Employee Ownership (NCEO) shows that private employee-owned businesses default on their loans far less than other businesses. In its June 2014 report, the NCEO finds that the default rate on bank loans to ESOP companies during the period 2009-2013 was, on average, an unusually low 0.2 percent annually. By contrast, mid-market companies in the U.S. typically default on comparable loans at an annual rate of 2 to 3.75 percent. Click here to read the full study.

A Second Study from Simpson-Bowles Commission Tax Advisor Reveals the Macroeconomic Impact of S ESOPs

Macroecomic_Impact_of_S_ESOPs_studyEconomist Alex Brill, a fellow at the American Enterprise Institute and CEO of consulting firm Matrix Global Advisors, introduced a study looking at the “Macroeconomic Impact of S ESOPs on the U.S. Economy.” Findings from the report reveal that employee-owned companies that have employee stock ownership plans have demonstrated higher productivity and increased economic resilience despite economic fluctuations. According to the study, “The S ESOP structure in particular has been show to lead to greater firm longevity and higher wages, wage growth, job stability, retirement plan contributions, employment, and sales than would otherwise have been anticipated.” Click here to read the full study.

Simpson-Bowles Commission Tax Advisor Publishes Study Detailing Economic Value of S ESOPs

Brill_S_ESOP_Study_2012Economist Alex Brill, former advisor to the Simpson-Bowles bipartisan deficit reduction commission and a fellow with the American Enterprise Institute, released a study showing that private employee stock ownership plans (ESOPs) organized as S corporations increased employment over the last decade more quickly than the overall private sector. “S-ESOP” companies, the Brill study reported, jobs grew by 60 percent over the past decade, while jobs in the private economy remained relatively flat. According to the study, the unique strengths of employee ownership drove company gains and jobs in the past decade, while helping insulate S-ESOP businesses from the adverse effects of the recent recession. Click here to read the full study.

Georgetown University/McDonough School of Business Study Finds that S Corporation ESOPs are Job Creators

ESCA_Performance_StudyA Georgetown University/McDonough School of Business study found that S corporation ESOP companies are proven job creators, even during difficult economic times. Additionally, the study found that S corporation ESOP companies provided substantial and diversified retirement savings for their employee-owners at a time when most other, comparable companies did not. Despite the difficult economic climate, survey S ESOP companies increased contributions to retirement benefits for employees by 18.6%, while other U.S. companies increased their contributions to employee retirement accounts by only 2.8%. Click here to read the full study.

University of Pennsylvania Study Finds S ESOPs Yield Billions in New Benefits for U.S. Workers and the Economy

University_of_Pennsylania_S_ESOP_studyIn a 2008 University of Pennsylvania study, two leading tax and economic experts found that Subchapter S companies owned by their employees through ESOPs generate some 85,000 new jobs each year and create $14 billion in new savings for workers that otherwise would not have been earned. The authors reported that S ESOPs offer their workers higher job stability, which accounts for $3 billion worth of the workers’ savings. Moreover, they found S ESOPs’ higher productivity, profitability, job stability and job growth collectively help ESOP companies amass $33 billion more in combined earnings than what they would earn if they were not ESOP-owned S corporations. Click here to read the full study.

National Center for Employee Ownership Study Finds that S Corporation ESOPs are a Major Force in Providing Retirement Security to Workers

A 2005 survey by the National Center for Employee Ownership (NCEO) found that S corporation ESOPs are a major force in providing retirement security to workers. In the survey, S corporation employee-owners reported that their ESOP account balances are three to five times higher than the U.S. average for 401(k) plan participants. For S corporation employee-owners nearing retirement, ESOP account balances were five to seven times the average. Click here to read the full study.