Today, there are more than 6,300 companies with an Employee Stock Ownership Plan (ESOP), making them employee-owned, with about 250 more created each and every year. According to the National Center for Employee Ownership (NCEO), “Employee ownership is a term for any arrangement in which a company’s employees own shares in their company or the right to the value of shares in their company.” The most common form of employee ownership in the U.S. is the Employee Stock Ownership Plan (ESOP), a key component of sustainable business practices.
Robinson, a leading custom metal manufacturer and OEM manufacturer, is proud to be among the many organizations that are 100% employee-owned through an ESOP. Robinson is in good company as other 100% employee-owned companies include Gallup News, Publix and Forbes. Let’s take a closer look at the benefits of an ESOP.
- You own it! Employees who helped build Robinson now own the business through our ESOP. Compare that to a non-ESOP sale where employees get nothing and are at risk of losing their jobs due to downsizing or a company move to a new state/city.
- Higher job satisfaction—employee-owners at Robinson experience higher job satisfaction and motivation when they have a voice in shaping company success.
- Long term vs. short term—employee-owners think long-term and produce higher quality work instead of focusing on short-term profits.
- Greater corporate performance—research shows that ESOP companies fare better due to a greater stake in the company’s success, even during challenging economic times.
- Boosted growth—ESOPs experience 2% higher sales and employee growth year after year than non-ESOP businesses.
- Talent Attraction and Retention—with ownership as a perk, ESOP businesses attract the best talent who tend to stay for a long time.
- Greater job security—ESOPs are 3-to-4xs more likely to retain staff.
- Fewer pay cuts—ESOPs are less likely by half to make pay cuts.
- Build personal wealth—employee-owners earn stock shares each year inside a retirement savings trust, which can increase over time depending on employment term.
- More for retirement—ESOP employees who also contribute to a 401(k) save about 2.5xs more for retirement than those who don’t.
- More impact on share value—employee-owners have a direct impact on the value of their shares, which can increase at a greater rate. If the company stock increases, so does the net worth of every employee.
- Tax benefits—employee-owners aren’t taxed on income earned in their retirement accounts until they actually receive distributions.
- Median wage income for employee-owners is 33% higher.
- Voluntary quit rates are roughly one-third of the national average.
- Job tenure—ESOP workers have 53% longer median job tenure.
- Household net worth for employee-owners is 92% higher.
- ESOPs keep jobs local—ESOPs invest in their communities and reduce the likelihood of outsourcing or relocation.
- Higher quality products—ESOPs produce products of higher quality, reduce waste, mitigate risks and make better decisions, all of which improve the company’s bottom line.
Clearly, the benefits of an ESOP at Robinson create a win-win scenario for both company and employee-owners. In October 2023, Robinson became 100% employee owned.
“Our employees built this company and its success from the ground up, so it only made sense to leave the company in their hands,” said Robinson CEO, Darrell La Crosse.
To learn more about Robinson’s ESOP, visit robinsoninc.com/careers/employee-ownership.
