employeeowned

Employee ownership, or employee-owned businesses, refers to firms in which employees hold a meaningful portion of the company's equity and may participate in its governance. Ownership can be direct, via shareholdings; or structured through plans and trusts that allocate ownership to employees, often funded by the company or by employees themselves. Employee ownership can be pursued for reasons such as aligning incentives, sharing profits, and providing retirement security.

The main forms are employee stock ownership plans (ESOPs), worker cooperatives, and direct or broad-based share-ownership arrangements. ESOPs typically use a trust to hold shares on employees' behalf; voting rights and governance are defined by law and plan terms. Worker cooperatives are owned and governed by workers, with usually one member-one-vote rules. Other arrangements may involve profit-sharing or stock purchase programs that give employees ownership over time but without formal cooperative governance.

Governance and rights vary by structure. In ESOPs, employees benefit financially and may gain limited voting rights on certain matters, while a company's board and management retain control. In worker cooperatives, employees often participate in decision-making and leadership. In all cases, ownership is intended to influence culture, decision-making, and long-term performance.

Advantages include potentially higher productivity, employee retention, risk-sharing, and retirement assets. Drawbacks can include setup and administrative complexity, valuation and tax considerations, potential concentration of risk for employees, and governance challenges if ownership is diffuse.

Global practice varies, with stronger traditions of employee ownership in some regions. Policy support, business succession strategies, and market conditions influence adoption levels.