WASHINGTON – In a new op-ed for The Huntsville Times, Bill Roark, co-founder of employee-owned Torch Technologies writes that “[a]s leaders in business and government consider ways to spur economic growth and new jobs, part of their strategy should be to encourage more private businesses to embrace employee ownership.”
“Research shows that employee stock ownership plans (ESOPs) – through which businesses help employees save for retirement by giving them ownership shares in the company – can greatly benefit workers, businesses and our entire economy,” he writes, noting that “employee-owned S corporations (S ESOPs) have a long track record of creating jobs at a higher rate than the private sector as a whole, providing Americans with economic opportunity and security. In addition, ESOPs have been shown to improve productivity for businesses while strengthening retirement savings and providing greater financial security to employee-owners.”
As Roark points out, “[s]tudies have found that not only are employee-owners more confident about stability in their current jobs, they also feel more secure about their long-term financial futures. With Americans who work at S ESOP companies holding more than twice the average retirement savings as those who work at non-ESOP companies, this comes as no surprise.”
And it was Roark’s personal experience, having seen “the ESOP model work so well earlier in [his] career” that led him and his business partner “to make employee ownership a hallmark of our business. Since then, the results have been stellar. Torch has grown and thrived, supporting hundreds of well-paying jobs in the Huntsville area, making significant investments in the community to create additional jobs and support the community, while also providing our team with all the benefits of employee ownership.”
Roark was recently interviewed by economist Jared Bernstein, now a member of the White House Economic Council, about Torch’s experience as part of a study Bernstein authored for the Employee-Owned S Corporations of America (ESCA). As Roark writes, when Bernstein “asked why we decided to establish our ESOP at Torch, our answer was simple: People work hard to make a company successful, and when the company succeeds, they should share in that success. At Torch, the best way for us to do that was to treat employees as owners, with the responsibilities and benefits that come with having a stake in the success of the business.”
While “more than 3,000 American businesses, including Torch Technologies, have adopted this model, empowering one million employees with ownership in the businesses where they work” since Congress created the S corporation ESOP structure more than two decades ago, Roark writes that “more should be done to expand this successful model to additional companies … As Bernstein found through his research, a simple lack of education and awareness is often the biggest barrier to smaller and mid-sized privately held companies considering employee-ownership. Thankfully, he also identified some simple solutions to increase awareness, including providing resources and information to retiring business owners to help facilitate the creation of more ESOPs … and we encourage our elected representatives to support these kinds of commonsense steps to encourage greater employee ownership.”
- To read Bill Roark’s full op-ed in The Huntsville Times, CLICK HERE.
- To read Jared Bernstein’s new study, CLICK HERE.
- To learn more about the Employee-Owned S Corporations of America (ESCA), CLICK HERE.