Dealing With COVID-19 Through Employee Stock Ownership Plans

In this chapter, the authors argue that far from the shocking decision of firing employees to leverage their short-term liquidity, organizations may draw other innovative options such as giving company shares to their employees. Employee stock ownership (ESO) plans have the potential to secure financial liquidity for firms while simultaneously providing social inclusion as well as empowerment to people, relating their efforts directly to firms' performance and driving the economic system into a shared capitalism. However, while companies may be solving their financial constraints through ESO, the authors identified a trade-off related to the traditional position of hegemony of firms. They argue that the decision to share the risk through paying wages using firms' stock options derives in a progressive detriment of power and control that some organizations would not be willing to suffer.

Drivers and barriers for employee ownership – why is the United States in a positive circle while Denmark is not?

PurposeDrivers and barriers for employee ownership vary between countries because of differences in Politics, Institutions and the Economy (PIE). By analyzing this variation, the purpose of this study is to answer why employee ownership has developed fast in the United States and not in Denmark.Design/methodology/approachThe drivers and barriers for employee ownership are identified from the scientific literature, and the main societal dynamics are identified through the PIE model covering the dynamics between politics, institutional change and the economy. Politics focuses on different social groups influencing the development of institutions driving or hindering employee ownership in the economy.FindingsUnited States has followed a self-enforcing circle with broad political support of “shared capitalism,” including the employee stock ownership plan (ESOP) type of employee ownership. In Denmark, the labor movement rejected worker cooperatives as a main strategy and focused on building up the welfare state. Center-right parties favored employee stocks, but the institutional framework never overcame the barriers for employee ownership.Originality/valueThis is the first study to perform an analysis of politics, institutional change and economic development to explain drivers and barriers for employee ownership and to make a comparison between the development of employee ownership in the United States and Denmark.

Shared capitalism, social capital, and intra-organizational dynamics

Purpose The purpose of this paper is to explore employee participation in ownership and control in a modern corporation and its impacts on intra-organizational social capital and workplace dynamics. Design/methodology/approach Using the National Bureau of Economic Research Shared Capitalism Survey, it explores the varieties of organizational governance and tests the effects of shared capitalist programs and policies via multivariate regression analyses. Findings It presents empirical support for the main working hypothesis that employee participation in ownership and control enhances worker trust for the firm, which in turn promotes commitment to performance and innovation at workplace. Practical implications The empirical findings here imply that scaling worker participation can enhance productivity potentials of a firm. Originality/value Above all, this paper takes a look at shared capitalism and workplace participation in decision making through the lens of social capital.

Shared Capitalism in the USA

Already meaningful, US worker ownership can be expanded with public policies. The US spends about $1 trillion every five years on tax incentives for businesses. To expand worker ownership, the White House could develop an Office of Broad-Based Capitalism. Stock market companies should only be allowed deductions for executive pay if they have a broad-based worker ownership plan for all workers. Moreover, all Federal business tax subsidies could be conditioned on a broad-based worker ownership plan. However, worker ownership will never spread until earlier tax incentives for Employee Stock Ownership Plans (ESOPs) in stock market companies repealed by the first President George Bush, are reinstated with additional encouragements for all companies to make stock grants to workers. Finally, Congress needs to make it easier for small business people retiring to sell the company to the workers and for private equity firms to spin off their portfolio companies to the workers.

How Shared Capitalism Affects Employee Withdrawal: An Econometric Case Study Of A French-Listed Company

The academic literature emphasizes that shared capitalism positively affects employees attitudes at work. This paper investigates that issue by testing the relationship between shared capitalism and withdrawal behaviors (turnover and absenteeism). Recent literature interprets shared capitalism as a gift exchange between employers and employees. This paper builds on that literature. The analysis, based on an econometric case study, focuses on a five-year panel dataset of more than 800 subsidiaries belonging to a unique French-listed company. Our results show that only long-term shared capitalism translates into better withdrawal behaviors.