Employee Incentive ESOPs: An Equity Tool to Promote Engagement and Performance

Employee stock ownership plans (ESOPs) are experiencing renewed interest in America. In recent years, new ESOP formation was largely driven by the aging of the Baby Boomer generation (widely defined as those born between 1946 and 1964), and their desire to liquify their ownership in closely held businesses while rewarding their employees. There are other new forces driving this trend—the quest for equitable solutions for the growing divide between have and have-nots, the need for employers to retain and reward employees in a competitive talent market, and succession planning. In this article, I will discuss how an Employee Incentive ESOP can be used to promote performance and engagement in a broad-based manner.

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.

Employee Stock Ownership Plans for Tobacco Concept Stock Listed Companies and Corporate Innovation Investment

In this study, we discussed the influence of employee stock ownership plan (ESOP) on innovation investment in Chinese tobacco concept stock listed companies. Methods: we firstly performed empirical research method to investigate the differences in innovation investment between companies implementing ESOPs and companies not implementing ESOPs by using the panel data of tobacco concept stock listed companies from 2014 to 2020. Secondly, we further performed case study method to test the changes in innovation investment of tobacco concept stock listed companies before and after implementing ESOPs by choosing Hengfeng Paper as a research subject. Results: In tobacco concept stock listed companies, companies implementing ESOPs had higher level of innovation investment than companies not implementing ESOPs. After implementing the ESOP, Hengfeng Paper significantly increased its investment in innovation. Conclusion: In tobacco concept stock listed companies, the implementation of ESOP with ordinary employees as the main incentive object helps to promote innovation investment.

The Role of Broad-Based Employee Ownership Opportunities in Prisoner Reentry

This research investigates the relationship between Employee Stock Ownership Plans (ESOPs) and criminal participation as measured by arrests, conviction, and incarceration among formerly incarcerated individuals. Using the 1997 National Longitudinal Survey of Youth, I find that formerly incarcerated individuals with ESOP employment are significantly less likely to be arrested, convicted, and incarcerated. This effect likely operates through improvement in labor market outcomes: formerly incarcerated ESOP employees earn approximately 25 percent more in annual income and work roughly 8.8 percent more hours per week than formerly incarcerated workers who are employed but not working for an ESOP firm.

The effects of employee stock ownership plans on career development in a new era

Purpose China’s workforce is currently experiencing increased career-related stress. Employee stock ownership plans (ESOPs) may be used to help employees overcome these challenges. Little is known about how ESOPs affect employee career development. The purpose of this paper is to investigate the relationship between ESOPs and employee career sustainability and provide guidance for corporate management. Design/methodology/approach The authors employed a multiple linear regression model using a sample of 614 companies that implemented ESOPs between July 2014 and September 2017. Findings Employees’ career development benefited when ESOP funds originated from employee compensation and self-raised funds, and when the plan’s stock came from a source other than the secondary market. Career development also improved when employees and senior executives held a higher proportion of a firm’s total shares. In addition, the benefits to employee career development were greater in manufacturing enterprises, non-state-owned enterprises, and in Southern China. Research limitations/implications This study combined individual and organization research using person–organization fit theory and demonstrated that well-designed ESOPs are beneficial for career stability and sustainability. This work was based on data from Chinese companies; future studies could usefully investigate the effects of ESOPs in other countries and their particular impact in technology-intensive industries. Practical implications Decision makers in firms or government can use ESOPs to address employees’ career-related stress and challenges, especially during industry transformation. Originality/value The paper fills a gap in ESOPs research by showing the positive effects of ESOPs on career development.