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 ...

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 ...

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.

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.

In fact, a survey of executives at ESOP and non-ESOP firms conducted during the Covid-19 pandemic (between August 5, 2020, and September 23, 2020) revealed that “ESOP companies were between 3 ...

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.

They also benefit from significantly better job stability. During COVID, ESOPs in the United States were four times less likely to experience layoffs than non-ESOP businesses.

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 ...

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.

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.

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.