Key Facts About S ESOPs

What is an S Corporation ESOP?

A Sub-chapter S corporation is a business entity that provides flow-through tax treatment to its shareholders. An employee stock ownership plan (“ESOP”) is a qualified defined contribution plan that provides a company’s workers with retirement savings through their investments in their employer’s stock, at no cost to the worker.

ESOPs are regulated by the Employee Retirement Income Security Act (“ERISA”) just like pension funds, 401(k) plans, and other qualified retirement plans. Congress authorized the S corporation ESOP structure to encourage and expand retirement savings by giving more than a million American workers in all 50 states the opportunity to have equity in the companies where they work.

Key Facts

As shown in the key facts and figures below, today S ESOPs continue to accomplish exactly what Congress intended them to do: create jobs, generate economic activity and promote retirement savings.

46%

46% of Millennial employees at ESOPs have a net worth of over $50,000 compared to just 15% of their non-ESOP counterparts (John Zogby, 2019).

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83%

More than 8 in 10 ESOP workers are confident they’ll retire comfortably, nearly double the confidence level of non-ESOP workers (John Zogby, 2025). 

45%

The number of S ESOPs has increased by 45%, while the number of employees covered by S ESOPs increased by 338% since 2002 (Analysis of DOL 5500 Form Data, 2025). 

1.2 million

Nearly 4,000 S ESOPs cover more than 1.2 million participants and own more than $183 billion in assets in the United States as of 2022 (Analysis of DOL 5500 Form Data, 2025).

+33%

Between 2002 and 2019 the average S ESOP participant achieved a compound annual return of 12.1%, a third higher than the S&P 500 return over the same period (Ernst & Young 2022).

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$135 billion

S ESOPs distributed $134.5 billion in retirement savings from 2002-2022 (Analysis of DOL 5500 Form Data, 2025).

Financial Security

Employee-owners are more financially secure and less worried about their economic positions than other American workers.

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Financial Security

  • The total cumulative return per S ESOP participant from 2002-2019 were over $300,000 on average (Ernst & Young, 2022).
  • Working for an S ESOP company gives employee-owners an estimated $26,000 in added annual benefits (Ernst & Young, 2022).
  • During the pandemic, non-ESOP workers were more than 3x as likely to experience negative impacts to their job security, financial well-being, and retirement savings during the economic downturns than that of ESOP workers (John Zogby, 2021).
  • 66% of surveyed millennial workers at S ESOP companies expect to be better off than their parents, compared to 41% of their peers at non-ESOP companies (John Zogby, 2021).
  • 46% of millennial employees at ESOPs have a net worth of over $50,000 compared to just 15% of their non-ESOP counterparts (John Zogby, 2019).
  • While the percentage of older Americans filing for bankruptcy has increased nearly twofold since the 1990s, ESOP retirees feel three times more secure about their retirement savings than non-ESOP retirees (John Zogby, 2019).
  • Employee-owners contribute to and share in the success of their S ESOP companies, with the average S ESOP account balance in 2022 equaling $230,000 in return for the sweat equity employee-owners put in at work. (Analysis of DOL 5500 Form Data, 2025).
  • The average yearly employer contribution to the ESOP was 2.6 times that of companies offering a 401(k) ($6,567 vs. $2,507) (NCEO, 2021).

Retirement Security

S ESOP companies provide unmatched retirement savings and security to workers.

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Retirement Security

  • The average S ESOP account balance has more than doubled since 2002 from $115,000 to $230,000 (Analysis of DOL 5500 Form Data, 2025).
  • S ESOPs distributed $134.5 billion in retirement savings between 2002-2022 (Analysis of DOL 5500 Form Data, 2025).
  • While only 51% of private companies offer any type of retirement savings at a time when 49% of companies offer no option to save for retirement, all employee-owners have a retirement savings plan and 58% of S ESOP companies offer a second retirement savings option like a 401(k) (Ernst & Young, 2022).
  • Data shows that being an ESOP is associated with $67,616 more in retirement assets on average compared to a comparable traditional business (NCEO, 2021).
  • 91% of ESOP workers said they had enough savings to live comfortably during retirement, compared to only 49% of U.S. retirees (John Zogby, 2018).
  • S ESOP workers nearing retirement have a median account balance of $147,522 in their ESOP plus $98,974 in a non-ESOP plan(s). By contrast, 35 percent of all workers nearing retirement have neither retirement savings nor a defined benefit pension (NCEO, 2018).
  • The average S ESOP account balance was found to be more than double the average account balance at a non-ESOP company ($132,000 vs. $64,000) (NCEO, 2021).
  • S ESOP companies provide stronger benefits packages to their employee-owners than non-S ESOP companies, which boosts employees’ retirement security as they are less likely to have to dip into savings for medical or education expenses (NCEO, 2018).
  • Nearly 80% of S ESOP companies offer another retirement plan in addition to the ESOP (NCEO, 2021).

Economic Growth and
Job Security

S ESOPs are a major force of economic growth and job security – even and especially in times of economic downturn.

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Economic Growth and
Job Security

  • Employee-owners experienced layoffs at nearly one-fourth of the national average in 2023 (NCEO, 2023).
  • S ESOP leaders report voluntary quit rates of their employees at roughly one-third of the national average (NCEO, 2023).
  • ESOP employees were twice as likely as non-ESOP employees to say their companies made an effort to provide economic opportunity in the community (John Zogby, 2022).
  • S corporation ESOPs outperformed the S&P Total Returns Index in terms of total return per participant with net assets of S ESOP accounts a third higher than returns from the S&P 500 from 2002 to 2019 (Ernst & Young, 2022).
  • 72% of millennial employee-owners feel there is room for them to grow at their current companies (John Zogby, 2019).
  • 69% of ESOP workers report they have opportunities to advance beyond their current financial situation, while just 52 percent of Americans adults felt the same way (John Zogby, 2017).
  • While total non-farm private employment in the United States has increased 8 percent since 2002, employment among S ESOPs in continual operation since 2002 has increased an impressive 37 percent as of 2017 (Matrix Global Advisor, 2017).
  • Nearly 4,000 S ESOPs employ more than 1.1 million people and own more than $190 billion assets in the United States as of 2025 (Analysis of DOL 5500 Form Data, 2025)
  • A majority of ESOP workers (61%) have saved at least twice their annual household income for retirement compared to just 15% of non-ESOP workers (John Zogby, 2025).

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