I found the results of our poll last week of ESOP companies and professionals surprising and somewhat pessimistic.
Our respondents believed ESOP companies would fare slightly worse than their non-ESOP competitors with a respondent’s rating of 2.3 out of 5.
The National Center for Employee Ownership (NCEO) in a 2013 study found that “…firms offering ESOP significantly outperform firms not offering ESOPs. Further, on average, as ESOP participation increases within organizations, so too does firm profitability.”
“Research on Employee Ownership.” NCEO, www.nceo.org/employee-ownership-data/academic-research.
When asked if the current economy would lead to more, fewer, or the same number of new ESOPs, the average answer was 2.56 out of 5, leaning to more over flat. I personally would not start an ESOP in an uncertain economy, particularly if my company’s value is being depressed.
The attitude towards the Election is interesting. With an average rating of 3.67 out of 5, respondents thought a change in Administration would be a positive for ESOPs. With an average rating of 2.67 out of 5, respondents thought a continuation of the current Administration would be a positive. Apparently, some respondents believe that neither a change nor no change would affect ESOPs.
Lastly, the average respondent thought the status of ESOPs would be basically neutral in 5 years compared to today, with an average rating of 2.4 out of 5.
Share your life experience and knowledge. What do you think the impact will be? Post your comments below.
For more information on ESOPs visit esop.org