The following press release was sent out yesterday by the Employee Ownership Foundation.
For Immediate Release: September 14, 2011
For More Information: Amy Gwiazdowski, 202/293-2971, amy AT esopassociation.org
ESOP Companies Report Positive 2010 Even Amid Slow Economic Recovery
September 14, 2011 (Washington, DC) — Results from the Employee Ownership Foundation’s 20th Annual Economic Performance Survey of ESOP (employee stock ownership plan) companies that are members of The ESOP Association show that ESOPs, while not immune to economic developments beyond their control, have seen an upturn over the past year. The survey shows ESOP companies, by significant percentages, continue to have increased share value, better productivity, and overwhelming support among leaders of the companies.
Since the survey’s beginnings 20 years ago, and the case in all the years the survey has been conducted even in 2009, a very large majority, 92.2% of survey respondents, reported that creating employee ownership through an ESOP was “a good business decision that has helped the company.” In addition, 72.9% of respondents indicated the ESOP positively affected the overall productivity of the employees. In terms of profitability and revenue, both were up from previous years — 68.1% of respondents reported profitability increased and 70.2% of respondents noted revenue increased. In terms of stock value, the majority of respondents (79.6%) stated the company’s stock value increased as determined by outside independent valuations, 17.1% of the respondents reported a decline in share value, and 3.3% reported no change.
“In looking at past results, it’s interesting to see performance numbers in a significant reverse of what was reported last year where so many U.S. corporations suffered financially,” said Employee Ownership Foundation President, J. Michael Keeling. “It would be a shame if the Congressional bipartisan support for our modest national policy encouraging employee ownership was not enhanced as Congress looks for a ‘common’ ground policy encouraging U.S. based jobs.”
The survey asked companies to indicate their performance in 2010 relative to 2009:
- 67.6% indicated a better performance; 21.8% indicated a worse performance; and 10.6% indicated a nearly identical performance to the previous year
- 70.2% indicated revenue increased; 29.8% indicated revenue decreased
- 68.1% indicated profitability increased; 31.9% indicated profitability decreased
- 58.3% of companies indicated they have created an ESOP education program or ESOP advisory committee since establishing the ESOP
The 2011 Economic Performance Survey was distributed to The ESOP Association’s over 1,400 members in May 2011. The results are based on 486 responses, a 35% response rate.
For additional information about the survey, please visit The ESOP Association’s website at www.esopassociation.org.
The Employee Ownership Foundation is The ESOP Association’s affiliated 501 (c)(3) organization dedicated to promoting employee ownership.
Founded in 1978, The ESOP Association represents over 1,400 ESOP companies who believe that employee ownership will improve American competitiveness, increase productivity through greater employee participation and strengthen our free enterprise economy.