For the second year in a row, corporate members of The ESOP Association appear to be managing their expenses extremely well, with resulting positive effects on profits and stock value.
Each year, The Employee Ownership Foundation sponsors the Economic Performance Survey—a poll of corporate members of The ESOP Association. The most recent survey (which is available now in the ESOP Store) shows an interesting relationship: While less than 1 percent of respondents saw revenue rise by 50 percent or more, 15 percent saw profits rise by 50 percent or more. (See the graph below.)
It would be unsurprising if profits and revenue rose in lock step. But for profits to rise more than revenue for a significant segment of the polled population suggests the respondents are excelling at doing more with less—finding efficiencies and cutting costs.
That aligns with anecdotal evidence gathered by Association staff members, who often have heard ESOP executives speak of involving employee owners in understanding the business and in managing expenses.
This year’s findings are consistent with the results from the previous survey, which found that only 1 percent of respondents saw revenue rise by 50 percent or more, while 11 percent of respondents saw profits rise 50 percent or more.
And of course, ESOP plan participants reaped the benefits of that performance. Among the 2017 respondents, 4 percent saw their stock price rise by 50 percent or more. (The findings again are consistent with 2016, when 3 percent of respondents saw their stock value rise 50 percent or more.)