Considering the economic impacts of employee ownership
Over the past several months, I’ve interviewed dozens of workers about their experiences in employee-owned companies. I’m exploring how different models (ESOPs, cooperatives, and alternative equity structures (AES)) impact workers’ financial security. This research is part of my work with the Worker Equity Lab and aims to strengthen our understanding of the economic impacts of shared ownership.
Where We’re At
So far, I’ve conducted 30 interviews and have 15 more scheduled, with 10 additional conversations to be scheduled. Here’s the current mix of the types of companies participating:
4 cooperatives
3 AES companies
4 ESOPs
Early Findings
Some themes are taking shape:
Financial benefits are real, but not evenly distributed across types
ESOPs offer the most significant financial benefits, particularly in mature, profitable companies.
In AES companies, the form of ownership that I’ve seen is “phantom stock” that only pays out at exit. This model feels disconnected from the day-to-day realities of ownership and somewhat antithetical to one of the priorities of Colorado’s EO initiative, keeping businesses in Colorado’s economy, owned by people in the community.
In cooperatives, especially in care or service sectors, co-owners report minimal financial benefit, largely due to the nature of undervalued industries and their limited profit potential.
Ownership model maturity matters
Earlier-stage employee-owned companies often don’t offer meaningful financial gains yet. Ownership feels abstract, and benefits are hypothetical.
In contrast, more established ESOPs can offer generous plans, but even then, some entry-level employees still juggle multiple jobs or take pay cuts to be there.
In ESOPs that don’t have profit-sharing/bonuses in addition to the ESOP and don’t invest much time in shaping the culture around the ESOP, the benefits are not well-understood by workers.
Cultural benefits may outweigh financial ones
Across all models, workers speak most positively about employee ownership in the context of the impact it has on company culture, transparency, accountability, and valuing of worker voice. Even where financial benefits are limited, the ability to influence decisions and feel valued is profound.
Challenges and Tensions
Through my preliminary research, some questions are emerging:
What are co-ops for, if not for creating financial security?
From what I’ve seen, cooperatives seem to prioritize democratic control over financial gain. This raises important questions about how we define and measure the impacts of worker cooperatives.Are the burdens of co-ownership too high for small orgs?
The administrative load in co-ops — especially small, early-stage ones — seems to outweigh the benefits. Is it sustainable without more structural support? How can we ease the burden?How do we evolve employee ownership for undervalued work?
Many co-ops exist in the care and service industries where wages are low, even with co-ownership. Can shared ownership elevate the value of this work, or does it simply replicate existing market dynamics?
What’s Next
To complement the qualitative insights from my interviews, I’ll be launching a survey to gather quantitative data on:
Take-home pay
The size of retirement accounts
Other sources of income that co-owners maintain
Personal financial security over time
Perceptions of ownership and control
I’ll also be conducting more research on the requirements for becoming employee-owned to better understand the hurdles of transitioning for each type of EO approach.
I would also like to model out the financial impact for workers across businesses, considering size and EO approach. I’d like to look at a few hypothetical scenarios, based on real-world examples of companies that fall into these categories.
I'd Love Your Input
What questions would you want answered by this research?
If you have recommendations for where I can find information or tools to support my financial modeling, I’m all ears!