Employee ownership is an arrangement in which an employee gains ownership of equity (otherwise known as stock or shares) in a company, thereby acquiring the opportunity to benefit from future cash flows generated by the company. 

There are a variety of ways for employees to acquire ownership of company equity, including employee stock ownership plans (ESOP), stock grants, and stock options. 

According to the National Center for Employee Ownership, just over 6,300 U.S. companies participate in ESOP, with approximately 14.7 million participating workers. There are about 132 million full-time and 28 million part-time employees in the U.S. The vast majority of employees do not yet hold equity in the companies for which they work.  

Why is Greater Transparency Important?

Work to Own believes a key reason why employee participation in company equity has yet to catch on is because of a lack of easily accessible information. 

There is not enough public reporting of employee ownership data, even for publicly traded companies. Because of this information gap, there is no transparent measure that can provide guidance to managers about the appropriate level of employee ownership that would be consistent with company performance and maximizing shareholder wealth.

Market-Driven Solution

Our solution leverages the free market forces of capitalism to address a problem that years of government intervention has failed to solve: a public-facing Employee Ownership Index that measures employee stock ownership within and between companies.

The power of such an index should not be underestimated. In addition to directly and indirectly impacting market value, it is a way for companies to signal their good intentions.