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A Statistical Profile of Employee Ownership
Updated December 2015
Number of ESOPs and Participants, and Plan Asset Value
| Type | Number of Plans | Total Participants | Employer Securities | Total Assets |
|---|---|---|---|---|
| Standalone ESOPs | 5,489 | 1.66 million | $102.9 billion | $115 billion |
| KSOPs | 1,306 | 12.26 million | $159.4 billion | $1.12 trillion |
| Total for all literal ESOPs | 6,795 | 13.9 million | $262 billion | $1.23 trillion |
| ESOP-like plans | 2,528 | 1.18 million | $22.2 billion | $64 billion |
| Total for ESOP and ESOP-like plans | 9,323 | 15 million | $284.6 billion | $1.3 trillion |
Source: NCEO analysis of the Private Pension Plan (PPP) Research File made available by the Department of Labor from data reported on the Form 5500 for filing year 2013.
To count literal ESOPs, we include all sponsors with plan type codes 2O (ESOPs other than leveraged ESOPs), 2P (leveraged ESOPs), and 2Q (S corporation ESOPs).
Total asset amounts shown exclude funds held by life insurance companies under allocated group insurance contracts for payment of retirement benefits. These excluded funds make up roughly 10%-15% of total pension fund assets.
ESOP-like plans are here defined as profit sharing, stock bonus, and other defined contribution plans that are substantially (at least 20%) invested in employer stock, and have at least five participants.
To count literal ESOPs, we include all sponsors with plan type codes 2O (ESOPs other than leveraged ESOPs), 2P (leveraged ESOPs), and 2Q (S corporation ESOPs).
Total asset amounts shown exclude funds held by life insurance companies under allocated group insurance contracts for payment of retirement benefits. These excluded funds make up roughly 10%-15% of total pension fund assets.
ESOP-like plans are here defined as profit sharing, stock bonus, and other defined contribution plans that are substantially (at least 20%) invested in employer stock, and have at least five participants.
For a more detailed description of the methodology used here, see the article NCEO Methodology for Counting ESOPs.
Age of ESOPs
| Plan Effective Year | Number of Plans | % of Plans | Total Participants |
|---|---|---|---|
| Before 1980 | 785 | 12% | 5,955,922 |
| 1980-1989 | 1,210 | 18% | 4,224,420 |
| 1990-1999 | 1,612 | 24% | 2,570,461 |
| 2000-2010 | 2,561 | 38% | 973,678 |
| Since 2010 | 627 | 9% | 203,055 |
Summary Characteristics of ESOPs and ESOP Companies
| Privately held company | 92% |
| Public company | 8% |
| Leveraged ESOP | 44% |
| Nonleveraged ESOP | 56% |
| S corporation | 45% |
| C corporation | 55% |
| Fewer than 100 total participants | 57% |
| 100 or more total participants | 43% |
| Manufacturing sector | 22% |
| Other sectors | 78% |
Trends in ESOP Numbers and Participation
ESOPs were given statutory authority in 1974. We believe there were about 250,000 participants in about 1,500 ESOPs in 1975. In the early 2000s, we saw the number of net plans (new plans minus terminations) decline, largely the result of a large number of very small and very dubious plans that were set up (and usually not even funded) to try to take advantage of then recent S corporation ESOP tax law. Congress, the IRS, and the ESOP community all acted to prevent these plans from operating and almost all were then terminated.Meanwhile, existing ESOPs were growing faster than the economy, meaning that participant and asset numbers increased. One notable development has been the growth of acquisitions of company by existing ESOP companies. We estimate there are 300-400 such acquisitions each year, or about as many new ESOPs are are being formed. For details on this development, read Why Has the Total Number of ESOPs Gone Down But Participation and Assets Gone Up?
The table below shows that the number of plans identified as ESOPs has decreased, but the number of active participants has steadily increased. While 2,079 fewer individual ESOP plans filed in 2013 compared to 2002, the total number of participants increased from 10.2 to 13.9 million over the same period. Currently employed workers covered by an ESOP (active participants) increased from 7.9 million to 10.6 million.
| Filing Year | Number of ESOPs | Total participants | Active participants* |
|---|---|---|---|
| 2002 | 8,874 | 10,230,425 | 7,946,652 |
| 2003 | 7,934 | 10,049,154 | 7,570,321 |
| 2004 | 7,348 | 10,243,283 | 7,826,741 |
| 2005 | 7,198 | 11,998,319 | 9,448,271 |
| 2006 | 7,384 | 12,584,772 | 9,850,008 |
| 2007 | 7,326 | 13,218,808 | 10,173,536 |
| 2008 | 7,305 | 13,037,946 | 10,055,117 |
| 2009 | 6,690 | 12,996,711 | 10,014,524 |
| 2010 | 7,138 | 13,477,187 | 10,306,818 |
| 2011 | 6,941 | 13,462,955 | 10,288,363 |
| 2012 | 6,908 | 13,823,595 | 10,603,334 |
| 2013 | 6,795 | 13,927,535 | 10,578,114 |
*Active participants include any workers currently in employment covered by a plan and who are earning or retaining credited service under a plan. This category includes any nonvested former employees who have not yet incurred a break in service. Active participants also include individuals who are eligible to elect to have the employer make payments to a Section 401(k) plan.
ESOPs are stock bonus plans qualified to borrow money from or on the sponsoring company's credit; otherwise, ESOPs and stock bonus plans are very similar. In 2002 there were 1,614 plans that fit into the category of ESOP-like plans. These plans tended to be larger: 66% had more than 50 participants. Over the last several years, this pattern switched. There is also evidence of an increase in these plans over the last several years of that period as shown in the table below.
Trends in ESOP-Like Numbers and Participation
| Filing year | 50 participants or fewer | More than 50 participants | All ESOP-like plans |
|---|---|---|---|
| 2002 | 546 | 1,068 | 1,614 |
| 2009 | 717 | 565 | 1,282 |
| 2010 | 1,144 | 532 | 1,676 |
| 2011 | 1,529 | 456 | 1,985 |
| 2012 | 1,888 | 343 | 2,232 |
| 2013 | 2,085 | 443 | 2,528 |
Survey Data on Broad-Based Employee Ownership in the US
The NCEO estimates that approximately 32 million Americans own employer stock through employee stock ownership plans (ESOPs), options, stock purchase plans, and 401(k) plans. The estimate is based a variety of company surveys and, where available, government data. Another way to look at the data was provided by several questions included in the General Social Survey (GSS), a 2014 random sampling of working adults performed by the National Opinion Research Center (NORC) of the University of Chicago. Joseph Blasi and Douglas Kruse of Rutgers and Richard Freeman of Harvard, all affiliated with the Shared Capitalism Project of the National Bureau of Economic Research, organized the questions and their analysis. The NCEO was one of the sponsors of the survey questions, along with the Shared Capitalism Project, the Beyster Institute, the Plan Sponsor Council of America, and the Employee Ownership Foundation. The Shared Capitalism Project receives support from the Rockefeller and the Russell Sage Foundations.The GSS data are reported in detail in a separate page on this site. In sum, however, they showed 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.
In what follows, we present estimates of equity grants (primarily stock options and restricted stock), and employee stock purchase plans (ESPPs). While about 8% of 401(k) assets are in company stock, these plans serve a very different purpose than other kinds of employee ownership plans and so are excluded from this analysis.
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 General Social Survey, 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.
