Leveraged ESOP vs. non-leveraged ESOP: In simple terms, if a company has the funds to purchase its stock outright it is non-leveraged, while stock purchased through financing is considered leveraged.

This is when they gain access to a share of ownership. Most ESOP employees, about 71-percent of them, also receive profit sharing. This compares to about 31-percent of non-ESOP employees.

A 2023 study by the NCEO found that employees at ESOP-owned S-corporations have more than twice the amount of retirement savings as their non-ESOP counterparts: the median ESOP account balance is ...

After the ESOP transaction, most sellers continue to manage the business and build an “ownership culture” which is the driving force for ESOP companies out-performance of non-ESOP counterparts.

According to the National Center for Employee Ownership (NCEO), companies with ESOPs grow 2.5% faster than non-ESOP companies, largely due to the sense of ownership employee-owners feel.

Having advised approximately 35 ESOP companies, we have seen that employee-owned businesses consistently outperform their peers on key metrics such as retention, profitability, and resilience.

On February 6, 2025, a Pennsylvania federal judge gave preliminary approval to a $2.1 million settlement resolving a class action involving the Pride Mobility ESOP. This case is one of six brought ...

ESOPs offer a tax-efficient way to transition ownership, and as federal programs like the SSBCI continue to expand, more small businesses will be able to take advantage of these structures.

One study from the National Center for Employee Ownership found significantly improved retention at companies with ESOPs — a median of 5.1 years of tenure, compared with 3.5 years in other companies.

In contrast, new research demonstrates that ESOP companies are more productive than non-ESOP companies. The increased engagement and productivity lead to higher profits and increased job security.

In simple terms, an ESOP is a type of employee retirement benefit plan, governed by the Internal Revenue Code (IRC) and the Employee Retirement Income Security Act of 1974 (ERISA), that is ...