The first study of majority employee-owned enterprises in the U.S.: an historical retrospective analysis

Research conducted in 2010 to identify and collect information about majority employee-owned enterprises in the U.S. is documented in this paper. This research identified 1, 289 firms that were majority owned by their employees and their basic characteristics are reported here. Overwhelmingly, these companies were owned through an employee stock ownership plan (ESOP). They were characteristically older and larger than conventionally owned firms, as well as more concentrated in manufacturing and wholesale trade, and more likely to be located in the Midwest than U.S. firms overall. The paper argues that because the effects of employee ownership are likely to be correlated with the degree of employee ownership, research on ESOPs should endeavor to identify the degree of plan ownership of equity rather than simply the presence of a plan. This may also provide a method to address the non-random assignment of ESOPs to firms. The majority employee-owned ESOPs documented in this paper provide a viable population to study the effect of residual claimancy on employee behavior in isolation from other potentially confounding factors.