Researchers now agree that "the case is closed" on employee share ownership and corporate performance. The research comes to a very definite conclusion: The combination of ownership and participative management is a powerful competitive tool. Neither ownership nor participation alone, however, accomplishes very much. Findings this consistent are very unusual. We can say with certainty that when ownership and participative management are combined, substantial gains result. Ownership alone and participation alone, however, have, at best, spotty or short-lived results.


Over the years, several organisations accross the world have reported on new research on employee share ownership and corporate performance. Now that a substantial body of work exists on the subject, they thought it would make sense to summarize it in one place. This is why they set up dedicated pages about employee share ownership and corporate performance, here are the best ones:
             The ESOP Association in USA
             The NCEO - National Center for Employee Ownership in USA
             The Employee Ownership Group in Australia

05.11.2023: Employee Ownership Knowledge Programme 2023 in the UK, delivering two reports: Conclusion Report and Detailed Report. The EO Knowledge Programme establishes a new baseline in the understanding of the scale and impact of employee ownership in the UK, contrasting employee-owned with non-employee-owned businesses for the first time across economic, social and environmental outcomes.

23.05.2017: Employee Ownership and Economic Well-Being, Nancy Wiefek, NCEO. This new research compares workers with employee ownership benefits to those without, and finds that those in the employee ownership group have 92% higher median household wealth, 33% higher income from wages, and 53% longer median job tenure.

23.05.2017: How Did Employee Ownership Firms Weather the Last Two Recessions? Fidan Kurtulus and Douglas Kruse, Upjohn Institute for Employment Research. Companies with employee stock ownership had only half as many layoffs as other companies during the last two recessions.

06.10.2016: Employee ownership and firm performance: a meta-analysis, Ernest O'Boyle, Pankaj Patel and Erik Gonzalez-Mulť, Human Resource Management Journal, June 2016
We do find that the effect of employee ownership on performance has increased in studies over time and that studies with samples from outside the USA report stronger effects...

27.09.2016: Kyoung Yong Kim and Pankaj C. Patel, Employee ownership and firm performance: A variance decomposition analysis of European firms", Journal of Business Research, August 2016

19.07.2016: Does Employee Stock Ownership Work? Evidence from publicly-traded firms in Japan
Takao Kato, Hideaki Miyajima and Hideo Owan, June 2016
Our fixed effect estimates show that an increase in the strength of the existing ESO plans measured by stake per employee results in statistically significant productivity gains. Furthermore, such productivity gains are found to lead to profitability gains...

20.01.2016: Levels of Employee Share Ownership and the Performance of Listed Companies in Europe
Ansgar Richter & Susanne Schrader - British Journal of Industrial Relations, January 2016
The results show that firms with employee share ownership enjoy significantly higher levels of capital market performance and of accounting performance than firms without ESO; however, the marginal effects of ESO are declining with increasing ESO levels...

31.03.2015: New study finds S ESOPs total return beats S&P 500 by 62%
A new analysis of the economic impact of S corporation ESOPs in USA examines trends in account balances, distributions to participants, total return, and the existence of other retirement plans. The study, performed by EY's Quantitative Economics and Statistics (QUEST) practice for the Employee-Owned S Corporations of America (ESCA), uses data from the Department of Labor and other sources. Its findings include:
† S corporation ESOPs are growing by many measures. They represented 22% of ESOPs in 2002 and 42% in 2012. The number of plans, participants, and net assets also increased over that time.
† The total return for participants in S ESOPs from 2002 to 2012 was an 11.5% compound annual growth rate, 62% higher than the S&P 500 Total Returns Index's 7.1% growth rate over the same period.

21.09.2012: British Department for Business, Innovation and Skills - Cass Business School Research: The employee ownership advantage   BIS commissioned a report from Cass Business School to look further at the impact of employer ownership on firms. Amongst other things, the report finds that employee owned businesses have a stronger long-term focus, invest more in human capital and have a greater preference for internal over external growth.

19.07.2011: Finland: The impact of Personnel Funds (doctoral thesis by Christina Sweins)

18.01.2011: According to the Center for Strategic Analysis of the French Republic, the social performance of a company having employee share ownership is 52% higher than that of companies which have neither employee share ownership nor employee savings plan; the effectiveness of employee share ownership has to be reinforced by ensuring the representation of employee shareholders. More information

10.01.2011: New study shows broad-based Stock Option Plans improve performance: One of the most comprehensive and convincing studies to date on the effect of broad-based option plans on company performance was recently released. Looking at non-executive options and the subsequent firm operating performance as measured by the firm's industry adjusted ROA, the authors found that "both the existence of a broad based option plan and the implied incentives of an option plan exert a positive effect on firm performance..." By contrast, companies with grants focused on executives did worse. More

10.09.2010: Geert Braam en Erik Poutsma - De invloed van financiŽle participatie door management en werknemers op financiŽle ondernemingsprestaties in Nederland 1992-2009

18.06.2008: New Research Confirms Majority-Owned ESOPs More Productive Than Non-ESOP Counterparts
The study, Employee Ownership and Participation Effects on Firm Outcomes, was conducted by Brent Kramer, an economics doctoral candidate at the time of the study and now a Ph.D. The Employee Ownership Foundation and the ESOP Association contributed membership information for the study. A total of 328 ESOP firms and over 2,000 matching non-ESOP firms were included in the study.

13.02.2008: Universität Chemnitz - Research Project: Business elements in the new payment policy, extent and effects of contingent compensation

18.10.2007: "Les effets de participation des salariťs sur la performance des entreprises", Xavier Hollandts - thèse de doctorat soutenue à Lyon le 4.9.2007

07.03.2007: The CoCo Report: Work, Happiness and Employee Ownership: Companies where workers have a say in decisions and a stake in ownership are more productive because staff are happier, according to a new report in the UK. The study found absence levels were lower and workers were more committed in "co-owned" companies. The British Government was urged to introduce tax incentives to encourage the launch of more co-owned companies. Download the full report

: New major document: Report for the European Parliament: A Review of the Issues and Evidence, by Virginie Pérotin and Andrew Robinson: Employee Participation in Profit and Ownership: A Review of the Issues and Evidence, Report for the European Parliament (60 pages, PDF)

30.11.2002: Wonderful research report on companies cases in UK: "Employee ownership, motivation and productivity", November 2002 (pdf, 34 pages).









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E-mail: efes@efesonline.org
Web site: www.efesonline.org
EFES' objective is to act as the umbrella organization of employee owners, companies and all persons, trade unions, experts, researchers, institutions looking to promote employee share ownership and participation in Europe.