Employee ownership can take many forms: employee stock ownership plans, worker cooperatives, broad-based equity sharing plans, and more. A less common approach in the US, but one that is gaining attention, is employee ownership trusts (EOTs). While research has demonstrated the benefits of employee ownership for business performance, business resilience, and job quality, the growth in the number of employee-owners has plateaued. The leveling off is not because fewer businesses are choosing employee ownership as a succession plan, but rather due to valuable employee-owned companies being sold. EOTs, a type of perpetual purpose trust, have the potential to sustain employee ownership over time, often while serving other purposes.
EOTs can provide profit-sharing, support democratic workplace practices, and, like other forms of employee ownership, are associated with improved productivity. While uncommon in the US, EOTs are the primary form of employee ownership in the UK. The model’s successes have been such that the government of Canada recently took steps to facilitate EOT transitions, and there are indications that the approach is gaining ground in the US, as well.
In this conversation from October 25, 2023, our expert panel discusses the current state of research into trusts, the benefits EOTs provide, how EOTs compare to other forms of employee ownership, the experiences of business owners and workers in trusts, and what the future holds for this model in the US.
Our speakers include Leah Hamilton (Optimax Systems), Chris Michael (EOT Advisors), Melinda Paras (Paras and Associates), Rick Plympton (Optimax Systems), and moderator Kristin Toussaint (Fast Company).
For more information about this event — including audio, video, transcript, and additional resources — visit our website: https://www.aspeninstitute.org/events/sustaining-ownership-the-promise-of-employee-ownership-trusts/