WASHINGTON, July 11, 2024 -- It's no secret that American employees are generally happier and more productive when they own a share of the firm they work for. A new study shows that similar benefits accrue to foreign workers of U.S. employee-owned companies that have operations overseas. That's significant, because in today's globalizing economy, many private, employee-owned U.S. companies are multinational corporations with global workforces and operations. The study was conducted on behalf of the Employee-Owned S Corporations of America (ESCA) by Rutgers University Institute for the Study of Employee Ownership and Profit Sharing. It underscores the "halo effect" of employee ownership for international employees of U.S.-based ESOP companies.
The study found that multinational ESOP (Employee Stock Ownership Plan) -owned companies appear to derive competitive advantages in international markets from being employee-owned. Executives reported numerous benefits, including enhanced recruitment and retention; employee productivity and financial security; corporate reputation; and customer loyalty.
Even in cases where foreign workers for ESOP companies do not have an ownership stake (due to legal, regulatory or cultural barriers), executives have found ways to ensure they can benefit financially from company success—for example through profit-sharing or grants of synthetic equity.
With more than 10 million participants in more than 6,000 U.S. corporations, ESOPs are the most prevalent form of broad-based employee ownership in the United States.
The Rutgers study drew on interviews with multinational S Corporation ESOP companies, including ESCA members Amsted Industries, Black & Veatch, Burns & McDonnell, Schweitzer Engineering Laboratories, and Taylor Guitars.
Stephen Smith, Chairman, President and CEO of Amsted Industries told Rutgers, "We do not have a retention issue for our leadership in any country.… You can tell that people are just proud to be a part of us. It's not only the pay, but it's that we integrate them into the company too."
"The efforts and success of these multinational private, ESOP-owned companies demonstrates that these companies are invested in the wellbeing and growth of all of their employees, and this has economic and cultural impact beyond U.S. operations" says ESCA President & CEO, Stephanie Silverman. "And each company finds a way to protect, adapt or expand that investment that in turn supports a secure ecosystem of trust, loyalty and growth."
With the employee ownership movement growing, and ESOPs increasingly seen as a major tool for strengthening business and driving growth that has bipartisan appeal, the Rutgers study's analysis and case studies offer new insights and models for today's globalizing economy.
To read Rutgers' full report, click here.
To learn more about the Employee-Owned S Corporations of America (ESCA) CLICK HERE
About Employee-Owned S Corporations of America (ESCA)
ESCA, Employee-Owned S Corporations of America, is the voice in Washington, DC that speaks exclusively for employee-owned S corporations ("S ESOPs"). Since 1998, ESCA's membership has grown to represent more than 250,000 employee-owners in virtually every state in the nation. ESCA company members engage in a broad spectrum of business activities and are a variety of sizes – from 25-person businesses to companies with 20,000+ employee-owners – but all have one thing in common: a commitment to protecting the S corporation ESOP structure and promoting it so that more working Americans can become employee-owners.
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