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The Employee Ownership Update

Corey Rosen

February 27, 2009

(Corey Rosen)

New Estimates of the Number of ESOPs and of Plan Assets and Participants

We have completely revised our estimating techniques for ESOPs and plans that function like ESOPs (stock bonus plans and profit sharing plans primarily invested in company stock) to create a more accurate and conservative estimate of the number of plans, how many participants they have, and the value of plan assets. Based on that, we estimate that for 2008, there were 11,400 plans. While we are reasonably confident about this number, we only feel confident about 2006 data for estimating the number of plan participants and asset value. For 2006, we estimate that there were 13.7 million participants with $923 billion in assets.

There was a blip upwards in the number of plans in 2000-2002, and a sharp drop in terminations between 2001 and 2003. This appears to be because of the adoption and then termination of sham S corporation ESOPs that were shut down by Congress and the IRS. Similar growth and shrinkage patterns did not occur in asset value and participant numbers. The revised data show that the number of plans has started to grow again in recent years, plan participation has generally moved upward, and plan asset size has grown substantially (albeit the current market conditions will undoubtedly push that number down).

Details on the data and the revised estimating techniques are on our Statistical Profile page.

A complete review of the data on all forms of employee ownership plans, including their impact on corporate performance, is available in the newly revised 2009 edition of the NCEO issue brief The State of Employee Ownership.

NCEO/Beyster Institute Conference Case Study the Poster Company for New Stimulus Bill

Before President Obama signed the economic stimulus bill in Denver, he and Vice-President Biden toured Namaste Solar, an employee-owned company and upcoming case study at our annual conference in Portland, OR, on April 22-24. Namaste has been a rapidly growing solar firm, but the decline in new construction and other economic problems might have forced it lay off 20 people absent the bill. Now it will hire 20 more employees. The story was covered in the New York Times (February 17, 2009).

Stimulus Bill Provisions May Help Some ESOP Companies

Many of the tax provisions in the economic stimulus bill may provide some benefits to ESOP companies. The key provisions include:

Center for Business Education Announces Employee Ownership Dissertation Award

The Center for Business Education at the Aspen Institute is providing a $1,500 award for a dissertation on shared capitalism through employee ownership. Details are at this link.

Author biography and other columns in this series

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