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The Employee Ownership Update

Loren Rodgers

February 1, 2012

(Loren Rodgers)

Employee Ownership in the 2010 General Social Survey

The 2010 General Social Survey, one of the largest and longest-running national surveys, found that the percentage of employees saying they have ownership in the companies where they work has been stable since 2006 at 17.5% of the private sector workforce. Among those who work for organizations that have stock, 36% report owning shares. The percentage of respondents saying they have stock options declined slightly, from 9.3% of the private sector workforce in 2006 to 8.7% in 2010. The GSS also examined voluntary and involuntary turnover. Less than 3% of people who say they own stock in their companies reported being laid off in the last 12 months, compared to 12% of those who do not own stock. In addition, while 24% of the non-owner employees intend to look for new jobs in the near future, only 13% of employee-owners do.

Survey Shows ESPPs Remain Key Part of Equity Strategies

Results from the 2011 National Association of Stock Plan Professionals/Deloitte Consulting survey show that employee stock purchase plans (ESPPs) continue to be an important part of public companies' equity strategies. The 598 respondents to the survey were all from publicly traded companies and were broadly distributed among industries. Twenty-eight percent had 10,000 or more employees and 31% had fewer than 1,500. Fifty-two percent of the responding companies have ESPPs, 82% of which are Section 423 plans. Of the remaining 48%, 29% (14% of the entire sample) once had a plan but eliminated it. Section 423 plans tended to have higher participation rates, though only a quarter have more than 40% of employees participating. By contrast, 38% of nonqualified plans have 0 to 10% participation. Over two-thirds of qualified plans offer a 15% discount. Nonqualified plans are more evenly split, with many offering a 15% discount and an equal number offering no discount.

Principal 10 Best Companies for Employee Financial Security

The Principal Financial Group released its tenth guide to best practices in employee financial security, which draws on the lessons of the winners of a prize for small and mid-sized companies. Employee-owned companies are traditionally well represented on this list.

Companies are also invited to apply for the 2012 awards. Applications are available online. Companies must have fewer than 1,000 employees to apply. Even if your company does not win, the feedback from the application process provides valuable benchmarking.

Employee Ownership and Charity

Reaching a goal it had been pursuing since 2002, Torch Technologies, a technical services company in Alabama, announced that it had become 100% ESOP-owned. In an interesting twist, employees and others contributed over $1 million to charities in connection with the transaction. "When the ESOP transaction came about, we wanted shareholders to be aware of the opportunity to set aside a portion of their good fortune for charitable giving," CEO Bill Roark said. Torch Technologies' leadership followed the example of ESOP-owned Dynetics, where employees used company stock to make contributions of $3.2 million to a local charity.

Employee Ownership Conference Filling Up

Registrations for the April Employee Ownership Conference in Minneapolis are 60% higher than they were at this point in 2011. Those who attended last year's conference know that it set an attendance record, so the signs are excellent for this year. As of today, 43% of the rooms in the conference's block have been reserved. We hope not to run out of space, but it is possible. Please consider registering soon at

A New Approach to Stock Ownership

In its January 31 issue, the Western Farm Press raises an all-too-common issue: "One of the complaints that dairy owners often have about employees is ... they don't take ownership in the operation. Yet, should we be surprised when employees don't take ownership in a business in which they have no ownership?" Just as we at the NCEO might do, the article's author Phil Durst suggests that employees at dairy farms ought to own stock. In this case, however, he is thinking of a different meaning of the word stock: head of cattle. Citing the example of Willow Bend Farm in Clifton Springs, NY, Durst writes, "For more than 30 years, Willow Bend founder George Mueller, and now son John Mueller, have encouraged employees to own cattle in the herd." He notes that employees are able to build assets and receive some tax benefits. Employee Tucker Coryn owns 10 head of cattle. He says, "I have a vested interest in the health of the herd, in the success of the herd. It engages me more than coming to work to manage someone else's cows."

Author biography and other columns in this series

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