Web Article
July 2019

Employee Ownership by the Numbers

This page presents counts and characteristics of ESOPs and other employee ownership plans in the U.S., using data made available by the U.S. Department of Labor, the General Social Survey, and other sources.

Page Contents

How Many ESOPs Are There?

As of 2016, the most recent year for which data is available, there were 6,660 ESOPs in the United States, holding total assets of nearly $1.4 trillion. A company may sponsor multiple ESOPs; the number of unique companies with an ESOP is approximately 6,460.

How Many Workers Are in ESOPs?

These plans cover over 14.2 million participants, of whom 10.7 million are active participants—those currently employed and covered by an ESOP.

Table 1: Table of Plans, Participants, and Assets

  Plans Total participants Active participants Employer securities (millions) Total plan assets (millions)
All stand-alone ESOPs 5,553 1,781,536 1,293,618 $125,480 $140,513
Private companies 5,401 1,378,042 1,004,609 $104,649 $114,242
Large private companies 2,088 1,240,142 901,187 $93,575 $101,519
Small private companies 3,313 137,900 103,422 $11,074 $12,723
Public companies 152 403,494 289,008 $20,831 $26,271
All KSOPs 1,107 12,497,565 9,383,202 $152,621 $1,238,065
Private companies 691 1,420,449 1,001,352 $25,581 $149,837
Large private companies 395 1,408,313 992,181 $24,712 $148,059
Small private companies 297 12,136 9,171 $869 $1,779
Public companies 416 11,077,116 8,381,850 $127,040 $1,088,228
Total 6,660 14,279,101 10,676,820 $278,101 $1,378,578

(See notes on sources and methodology)

What Kinds of Companies Have ESOPs?

ESOPs are represented across a wide variety of industries, with a plurality of plans in services or manufacturing companies:

Figure 1: Industries of ESOP Sponsors

 

S vs. C Corporations

The majority of ESOPs are in C corporations:

Table 2: S Corporation vs. C Corporation ESOPs

  Plans Total participants Active participants Employer securities (millions) Total plan assets (millions)
S Corporations 3,336 914,568 657,592 $75,445 $88,147
C Corporations 3,324 13,364,534 10,019,227 $202,655 $1,290,432
Note: We classify an ESOP as an S Corporation if the plan's Form 5500 filing uses the pension benefit code 2Q, "The employer maintaining this ESOP is an S Corporation."

Where Are ESOPs Located?

The midwestern U.S. is home to the greatest number of ESOPs, followed by the South. The below table breaks down the number of ESOPs and participants by Census region, sub-region, and state.

Table 3: ESOPs by location

State Number of ESOPs Total Participants Active Participants
Northeast 1,088 3,298,762 2,125,941
New England 320 1,030,072 651,093
Connecticut 64 422,631 249,248
Maine 42 7,320 4,557
Massachusetts 135 363,792 201,068
New Hampshire 29 6,817 4,935
Rhode Island 17 223,272 187,258
Vermont 33 6,240 4,027
Middle Atlantic 768 2,268,690 1,474,847
New Jersey 141 1,036,682 658,566
New York 321 846,576 551,091
Pennsylvania 307 385,432 265,191
Midwest 2,119 3,615,255 2,719,328
East North Central 1,229 2,138,293 1,587,558
Indiana 186 133,882 106,967
Illinois 347 747,387 567,551
Michigan 207 288,117 213,774
Ohio 296 784,564 548,483
Wisconsin 193 184,342 150,783
West North Central 889 1,476,963 1,131,771
Iowa 161 455,337 343,307
Kansas 106 72,071 45,975
Minnesota 270 790,124 617,320
Missouri 204 102,518 81,049
Nebraska 70 24,073 18,838
North Dakota 54 25,855 19,425
South Dakota 24 6,985 5,857
South 1,949 5,934,370 4,766,641
South Atlantic 999 2,805,033 2,170,585
Delaware 9 52,011 28,663
District of Columbia 14 4,410 2,644
Florida 186 501,923 430,330
Georgia 157 579,349 486,741
Maryland 130 343,563 248,834
North Carolina 122 781,487 588,951
South Carolina 60 37,439 25,426
Virginia 292 499,738 355,081
West Virginia 28 5,114 3,913
East South Central 341 373,148 283,839
Alabama 76 48,337 37,057
Kentucky 111 131,911 100,856
Mississippi 46 24,997 19,396
Tennessee 109 167,902 126,531
West South Central 609 2,756,189 2,312,217
Arkansas 59 1,709,215 1,552,599
Louisiana 83 38,624 31,043
Oklahoma 85 61,033 48,560
Texas 382 947,317 680,014
West 1,501 1,430,522 1,064,834
Mountain 422 168,222 122,008
Arizona 104 45,644 34,026
Colorado 116 36,832 26,110
Idaho 37 28,277 20,378
New Mexico 39 7,057 4,493
Montana 34 7,002 4,877
Utah 60 31,299 23,588
Nevada 23 9,702 6,514
Wyoming 11 2,408 2,023
Pacific 1,078 1,262,300 942,826
Alaska 27 1,594 1,227
California 806 681,229 510,790
Hawaii 66 16,867 11,686
Oregon 72 54,333 40,774
Washington 107 508,277 378,350

How Is the ESOP Universe Changing Over Time?

The below chart and table show the change in total ESOPs and total participants over time from 2010 to 2016.

Figure 2: Count of ESOPs and Total Participants, 2010-2016

 

Table 4: Count of ESOPs, Participants, and Plan Assets, 2010-2016

Filing Year Number of ESOPs Total participants Active participants Total plan assets (millions)
2010 7,138 13,477,187 10,306,818 $944
2011 6,941 13,462,955 10,288,363 $917
2012 6,908 13,823,595 10,603,334 $1,059
2013 6,795 13,927,535 10,578,114 $1,237
2014 6,717 14,050,344 10,563,219 $1,307
2015 6,669 14,431,622 10,829,726 $1,296
2016 6,660 14,279,101 10,676,820 $1,379

New ESOP Creation

Since 2010, an average of just under 230 new ESOPs have been created each year. The below chart shows new ESOP creation since 2010. Note that these numbers include all newly filing ESOPs, potentially including some newly established plans at companies that had already had an ESOP in place.

Figure 3: New ESOP Creation, 2010-2016

 

Age of Existing ESOPs

Most current plans were created before 1999. These plans also contain by far the greatest number of participants, as shown below.

Table 5: ESOPs by Age

Plan effective year (year created) Number of plans % of plans Total participants
Before 1999 2,920 45% 12,814,992
1999 - 2008 1,973 30% 898,483
Since 2009 1,667 25% 565,624

ESOP-Like Plans

As of 2016, there were 3,773 plans that are "ESOP-like": profit sharing, stock bonus, or other defined contribution plans that are substantially (at least 20%) invested in employer stock, and have at least five participants. The number of ESOP-like plans has been steadily rising, as shown in Table 6:

Table 6: Change in ESOP-like Plans Since 2010

Filing year Number of ESOP-like plans
2010 1,676
2011 1,985
2012 2,231
2013 2,528
2014 2,898
2015 3,241
2016 3,773

Nearly all (98%) of ESOP-like plans identify their plans as profit-sharing.

Other Forms of Employee Ownership in the U.S.

Data from the General Social Survey (GSS) show that as of 2014, 19.5% of all employees working in the private sector reported owning stock or stock options in their companies, while 7.2% specifically held stock options. Looked at another way, 36% of employees working for companies with stock (this excludes government employers, nonprofits, partnerships, etc.) owned stock or options in their companies. This means that approximately 32 million Americans own employer stock through ESOPs, options, stock purchase plans, and 401(k) plans.

Note that some companies offer multiple employee ownership plans, and many employees participate in more than one plan. For example, many ESPP participants also own stock in a 401(k) plan, get stock options, or have other equity compensation plans. Hence, the total number of participants in all employee ownership plans cannot just be added up to get the total number of employee owners.

Broad-Based Equity Grants

"Broad-based equity grants" are those that grant stock options to 50% or more of full-time employees. Unlike the case with ESOPs, it is not realistic to chart the growth of stock options year-by-year because there are no hard data compiled on a comparable basis year-by-year. We can look back at 1990 and estimate roughly 1 million option holders and look at the present day and estimate roughly 9 million option holders, but it is impossible to accurately say how many employees held options or similar equity awards in any particular year. Why? ESOPs are highly regulated retirement plans, and companies with ESOPs must tell the government every year how many employees are in the plan. The government regularly publishes summaries of these data. Although it is imperfect, it gives us something to go on. For stock options, on the other hand, nothing of the sort is available.

The best data come from the quadrennial GSS, which has been asking respondents if they get stock options at work since 2002. The percentage of all private sector workers receiving options fell from 12.3% in 2002 to 7.2% in 2014, which translates into 8.5 million employees compared to 13.4 million in 2002. New shareholder approval rules, growing concern with dilution, and new accounting rules are the primary culprits. Unfortunately, the GSS data does not provide on how many people get restricted stock and similar equity grants, although we know that with changes in accounting rules for stock options in 2006, many companies shifted to these awards.

Employee Stock Purchase Plans (ESPPs)

Employee stock purchase plans (ESPPs) include both tax-qualified "423 plans," which about 2,500 companies offer, and nonqualified plans, which about 1,500 companies offer. Data are based primarily on the National Association for Stock Plan Professionals' Stock Plan Design and Administration Survey (1998 and every two years thereafter), especially the more recent surveys, and a 2012 paper "Do non-executive employees have information? Evidence from employee stock purchase plans," by Ilona Babenko and Rik Sen. To estimate the number of employees covered under the plans, they took the total number of companies offering plans, multiplied those numbers by the average number of employees in the companies, and multiplied that number by the average percentage of participation in the plans. Almost all companies with ESPPs are public. Babenko and Sen found that in companies with ESPPs between 1998 and 2007, the mean annual contribution of participating employees was $1,630 per year.

Worker Cooperatives

Worker cooperatives are businesses owned and governed by their employees. Member employees govern the business, share its profits, and make decisions democratically on a one-member, one-vote basis. Worker cooperatives are less common than other forms of employee ownership. According to the Democracy Collaborative, as of 2017 there were 394 worker cooperatives in the U.S. with 6,734 employees.

Research on Employee Ownership and the Economy

An extensive research literature explores how employee ownership affects the economic fortunes of workers, companies, and communities. Read our summary here.

Sources and Methodology

These numbers are sourced from the NCEO's analysis of the Private Pension Plan (PPP) Research File made available by the Department of Labor from data reported on the Form 5500. The Research File is created each year by the Employee Benefits Security Administration's (EBSA) Office of Policy and Research (OPR) at the DOL and is used to generate and analyze aggregate statistics on the characteristics of the private pension plan universe. Direct Filing Entities (DFEs), welfare plans, one-participant plans, public retirement plans, and duplicate filings of other retirement plans are excluded from the Research File. NCEO methodology follows DOL standard practices with any exceptions noted.

Form 5500 filings are due seven months after each plan year ends. The DOL does significant work based on their historical knowledge of the companies and plans to correct for common errors and to weight the data to more precisely account for missing data and late filers. Generally, research files for each new filing year are available roughly a year after that deadline, e.g., filing year 2014 data was posted in September 2016.

Definitions of ESOPs are based on the plan characteristic codes filled in by the sponsor on line 8 of the form, or these codes were added as a result of the DOL's cleaning and editing of the data: 2O ("ESOP other than a leveraged ESOP") or 2P ("Leveraged ESOP—An ESOP that acquires employer securities with borrowed money or other debt-financing techniques"). Unlike the DOL, however, our count also includes plans without the 2O or 2P codes but with the code 2Q ("The employer maintaining this ESOP is an S corporation").

Large plans are defined as plans with 100 or more total participants and small plans as plans with fewer than 100 participants.

KSOPs are defined as ESOPs with a 401(k) plan feature. Stand-alone ESOPs have no such feature.

Active participants include any workers currently in employment covered by a plan and who are earning or retaining credited service under a plan.

Total asset amounts shown do not include the value of allocated insurance contracts of the type described in 29 CFR 2520, 104-44.

For questions about this or any of our research, contact NCEO Research Director Nancy Wiefek at nwiefek@nceo.org / 510-208-1312, or NCEO Research Associate Nathan Nicholson at nnicholson@nceo.org / 510-208-1313.

Return to top