Economic Development

Employee Ownership and ESOPs: What We Know from Recent Research

August 31, 2023  • The Aspen Partnership for an Inclusive Economy

In the US, about 18% of employees have some form of ownership stake in the company where they work, through structures like employee stock ownership plans (ESOPs), equity compensation programs, worker-owned cooperatives, and employee-owned trusts. More than 10 million Americans participate in ESOPs, and this has an impact on employee wealth creation, job quality, and workplace culture.

For a picture of the size of ESOP impact, Joseph Blasi and Douglas Kruse of the Institute for the Study of Employee Ownership and Profit Sharing at Rutgers University gathered the most recent and relevant data to present a brief at the recent Employee Ownership Ideas Forum—an event cohosted with the Institute’s Economic Opportunities Program

What’s new:

The brief gathers available public data, and adds analysis by the authors and other academics.

The quantity:

  • The 10.1 million employees in the 6,447 corporations with ESOPs have a total wealth of $1.8 trillion, an average of $180,292 per employee. 
  • About 8.8 million in ESOP plans are employed in 580 publicly traded companies, at a value of $1.6 trillion. 
  • Another 1.4 million are in 5,887 closely held or private corporations—most of them majority or 100% ESOP owned—worth $221.5 billion. 

The quality:

  • ESOP employees report that their wages are equal to or higher than market wages.
  • A majority of ESOP companies offer other high-quality benefits, from insurance to 401(k)s. 
  • Higher rates of ESOP employees report that they can participate in profit sharing, job training, and employee involvement teams. 

The challenges:

  • Black, Latino, and women workers are underrepresented among ESOP employers. 
  • ESOP growth is modest, creating only 244 per year between 2015 and 2020 on average.

Read the rest of the stats here.

Aspen Latino Business Summit

We are now less than a week away from the third annual Aspen Latino Business Summit in Washington, DC, hosted by the Aspen Institute Latinos and Society Program. On September 6 and 7, dozens of speakers and hundreds of attendees from government, corporations, foundations, and the entrepreneurial ecosystem will gather to examine innovative and successful efforts in growing Latino-owned businesses. 

Through interactive plenary sessions, working sessions, and networking events, the Summit will serve as a platform for connecting local leaders to national networks, federal policy makers, and influential investors. 

Session topics include:

  • Perspectives from Entrepreneurs
  • The Next Gen Sectors Powering Our Economy
  • Sustainability and the New Circular Economy
  • Innovative Financial Products 
  • Building Wealth Through Asset Ownership

schedule, speaker list, and registration are available here.

Case Study: UpSkilling for Career Mobility at PepsiCo

PepsiCo is one of the largest food and beverage companies in the world, with more than $86 billion in net revenue in 2022, and products consumed a billion times a day in more than 200 countries and territories around the world. The company has more than 300,000 employees globally and 100,000 in the US, many of whom are in front-line roles responsible for manufacturing, packing, or distributing products. 

A new publication from UpSkill America—part of the Institute’s Economic Opportunities Program—explores the company’s approach to investing in employees to prepare them for current and future roles. “We’ve put associates at the center of our training design, delivering resources in formats that resonate with them and are digestible within timeframes that can be integrated into daily operations,” said Ronald Schellekens, PepsiCo’s chief human resources officer. “Our goal is to ensure we are providing the tools to help our associates fulfill their career aspirations.” 

Key strategies: 

  • Creating a comprehensive upskilling suite. PepsiCo operates multiple distinct but connected upskilling programs designed to prepare employees for an increasingly digital future and to help them build the skills they need to advance. 
  • Building a talent marketplace. PepsiCo has implemented an internal talent marketplace that is not only the access point for employee learning journeys, but a way for them to see the array of opportunities available to them. 
  • Viewing upskilling as a strategic investment. PepsiCo works proactively to educate incumbent employees to consider open roles that are hard to fill. These roles often earn a competitive salary, and having many open positions for these roles costs PepsiCo in overtime and lost productivity when they cannot fill them externally. 

Read the case study here.

This piece was originally published in APIE’s newsletter ‘The Weekly Slice’. Click here to subscribe