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What is Employee Ownership?

At thousands of businesses in the United States, employees own a majority of their company's stock. These "employee-owned" companies employ millions of people who each have the ability to say "I am an owner of this company." Employee-owners are often more engaged and committed to providing superior products and services. To encourage the connection between the financial stake and entrepreneurial behavior, employee-owned companies often practice a participatory management style that encourages all employees to "think and act like owners.

Why Should New Jersey and New York Businesses Care?

For current business owners looking to retire or sell part of their equity stake, employee ownership is an attractive alternative to selling to a private equity firm or other outside buyer. As a business succession tool, employee ownership provides flexibility and significant tax benefits, while maintaining the integrity of the company. Employee ownership can also be used to create a market for shares or to raise capital. In addition, numerous studies show that, when combined with a participative culture, employee ownership increases corporate performance compared to similar companies without employee ownership.

Why Should New Jersey and New York Communities Care?

Employee ownership keeps businesses and jobs in-state and builds community wealth. Employees at employee-owned companies are four times less likely to be laid off, they receive 5 to 12% more in wages, and have retirement accounts that are 2.5 times greater than at comparable companies, resulting in more members of the community with secure financial futures. Additionally, employee- owned companies often make it a priority to give back to the communities where they are located.

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Bill Castellano
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