Closely Held Companies: New Paths to Employee Ownership Expanding

ESOPs and (to a lesser extent) worker cooperatives remain the principal ways employees become owners in closely held companies, but three recent trends have created alternative paths. Some private equity firms are providing restricted stock grants to all employees when they buy companies, some sellers are choosing to sell to nontax qualified employee ownership trusts, and TeamShares, a financial technology company backed by hundreds of millions of dollars in capital, is buying smaller companies and turning over what will eventually become 80% of the ownership to employees through stock grants. Private Equity Pete Stavros, the co-head of global equity for the private equity firm KKR, has long been an employee ownership advocate