Why Employee Ownership Is Quietly Reshaping Capitalism | Image Source: www.cnbc.com
WASHINGTON, D.C., April 9, 2025 - In an economy plagued by the separation of workers, renouncing confidence in leadership and the growing inequality of wealth, a silent growth movement redefines the relationship between companies and employees: employee share ownership plans, or ESOP. Since traditional corporate governance models are being criticized for the priority given to shareholders over stakeholders, ESOP offers a compelling counter-narrative. They promise not only financial returns, but also dignity, inclusion and the possibility of building intergenerational wealth, especially for those who are historically excluded from property.
According to Gallup, only 31% of American workers reported a commitment to work last year, the lowest in over a decade. Glassdoor adds that employees’ confidence in the future of their business has also reached the bottom of the rock. The consequences? The turnover, the calm of resignation and the deterioration of the culture of work. But there is an amazing approach that reverses these trends: turning employees into owners. From manufacturing workshop floors to professional service companies, shared ownership is the goal in the workplace and provides a basis for the long-term success of companies.
What is ESOP, and why are they important?
Employee ownership plans are pension benefit structures that allow employees to maintain equity in their employer, often at no initial cost. Although traditionally associated with small industrial enterprises, current SEPs cover industries, size of enterprises and demography. According to the National Centre for the Property of Employees (NCEO), there are approximately 6,500 ESOPs in the United States, serving nearly 15 million workers and managing over $1.8 billion in assets.
“These programs can really move the needle into the culture when they are well implemented,” said Pete Stavros, co-head of global private investment in KKR. Based on his father’s blue collar work and his own equity career, Stavros has become one of the most vocal champions of employee ownership. “They create wealth, increase commitment and reduce billing,” he said, stressing that employee ownership is not only good for workers, it is good for companies.
In 2015, KKR purchased CHI Entrance doors of $600 million and an employee share ownership model. When CHI was sold to Nucor for $3 billion in 2022, workers - many of whom work on time – received over $360 million. Stories like these give life to the abstract concept of “property” in the most tangible way.
What is the property of changing work experience?
Take Kevin Sims, Web Industries technician from Massachusetts. When he first learned that the company belonged to 100% employees, he did not understand what that meant. But when he started receiving annual ESOP statements and saw his wealth grow, something clicked. “It changed my life,” Sims said. “I come every day as if it were my first day because that’s how I’m proud.”
“The fact that he has a voice and faith in this business is as if he had a chance to help us grow,” said Sims. “It makes me want to do the 10 times better in my life.”
Employee ownership promotes a change of mind. Workers are beginning to act as partners. They seek economic opportunities, reflect on operational efficiency and even bring ideas that lead to measurable savings. Sims, for example, proposed a simple labeling solution that saved his company thousands of years, a gesture rooted in his sense of responsibility as owner.
Can ESOP solve the talent crisis?
Wayne Berson, CEO of BDO USA, thinks so. In the midst of the shortage of talent and the fierce competition of accountants, BDO transferred to an ESOP in 2023. At the time, the turnover of employees remained around 18%, compared with an average of 5.9% among ESOPs. The numbers were impossible to ignore.
“If you really care about people, that’s the only way to do it in my mind,” said Mr. Berson. “This was the only option for our future growth based on how we feel about people
In less than two years, BDO has seen a greater commitment and a reduction in attrition. For a professional service company that competes with talent, employee ownership not only stimulates morality – it has become a strategic advantage.
Why don’t you do more business?
Despite convincing case studies, the ESOP movement faces structural headwinds. The complexity of regulation, the risk of litigation and the limited tax benefits for large companies have kept annual growth stagnating. According to Mary Josephs, founder of Verit Advisors and former director of the Bank of America’s ESOP group, “it is too complicated for small businesses and too complex for large companies.”
In addition, while SECURE 2.0 mandated the Department of Labour to finalize clear evaluation standards for SEPs, regulatory progress was blocked. The rules proposed by the Biden government were withdrawn under the executive order of President Trump in early 2025, leaving companies without modern legal orientation. However, defenders continue to expect Trump’s Ministry of Labour to offer a more process-friendly rule.
“The Trump administration wants to work with us,” said Loren Rodgers of CNEO. “This is the positive development we have seen.”
What do policy corrections need?
Stavros, through its expanded ESOP coalition, encouraged legislative updates that would modernize and simplify the implementation of ESOPs. The group received support from over 50 bipartite and allied organizations in the Congress. “Without politics, we will not achieve our aspirations,” he said. Vision? Make ESOPs a conventional business model, not a niche alternative.
A key area of reform is the definition of ”appropriate consideration” in WEAP assessments. Current ambiguities have fuelled an increase in demand, discouraging new participants. Trump’s candidate at the head of the Employee Benefits Security Administration, Daniel Aronowitz, criticized the heavy approach to litigation, advocating fair and transparent assessment processes that promote – rather than punish – employee ownership.
How do POES affect the inequality of wealth?
POPs have become one of the most effective tools for addressing gaps in racial wealth and gender wealth. According to the Federal Reserve, only 39% of black families had shares in 2022, compared to 66% of white families. ESOPs equalize the rules of the game by providing own funds to workers who would otherwise be excluded from ownership of the assets.
” POPs can be particularly powerful to build wealth for black workers like me,” said Sims. Your goal now is to use your ESOP payment to launch a food trucking business that can transmit to your child, a history of economic mobility rarely heard in traditional employment stories.
Aspen Institute, Rutgers University and democracy at work show that employee ownership is a key strategy for economic inclusion. This is why forums such as “Workers to Owners”, held in Washington this week, are essential for shaping future business policies and actions.
What lessons can they not be?
Even for companies that are not ready for a complete transition to an ESOP model, there are significant escapes. Confidence building, transparency and voice are key elements of high-performance workplaces. Stavros highlights the importance of giving employees decision-making power – improvements to the Kaizen style process to $1 million in annual budgets in manufacturing plants for self-managed improvements.
Profit sharing, capital subsidies and significant participation in business planning can replicate all the benefits of the ownership culture. The goal is not only to make workers feel valued – it is really to value them by giving them the skin in the game.
As BDO’s Berson says, it’s about moving from me to us. And at a time of labour shortages, economic anxiety and growing scepticism towards institutions, this change could be the useful life of American business needs.
The stories of Sims, Kromminga, Jones and thousands of other wage-earners across the country highlight one truth: property changes everything. Not only retirement savings, but also motivation, community commitment and personal dignity. As one ESOP veteran said, “I went from unemployed to homeowners. It’s a change of life.”
Whether it is aerospace blankets that reach space or hospital dresses that save lives during a pandemic, when workers have a stake, they appear differently, not only for a cheque, but for a purpose. That is the promise of shared property. And perhaps, perhaps, it is the antidote to what relieves the modern culture of work.
