ESOP ADVISORY
ESOP FACTS & FIGURES
There are approximately 11,500 ESOPs in place in the U.S., covering 8.5 million employees (8% of the private sector workforce).
These employees draw in excess of 3% of their total compensation from ESOP contributions.
The growth of ESOP formation has been influenced by federal legistlation. While the rapid increase in new ESOPs in the late 1980s subsided after Congress removed certain tax incentives in 1989, the overall number has remained steady with new plans replacing terminated ESOPs. The approximate chronology is as follows:
| Year | Companies |
|---|---|
| 1974 | 200 |
| 1981 | 1,500 |
| 1984 | 2,500 |
| 1987 | 5,000 |
| 1990 | 10,000 |
| 1996 | 10,000 |
| 1997 | 10,000 |
| 2000 | 11,000 |
| 2003 | 11,500 |
About 1,000 ESOPs — 9% — are in publicly traded companies. However, these companies employ approximately 45% of the nation's 8.5 million employee owners.
An estimate 6,000 of the 11,500 companies have ESOPs that are large enough to be a major factor in the corporation's strategy and culture.
Approximately 3,000 ESOP companies are majority-owned by the ESOP.
Approximately 1,500 are 100% owned by the ESOP.
About 4% of ESOP companies are unionized. While ESOPs are found in all industries, more than 25% of them are in the manufacturing sector.
At least 75% of ESOP companies are or were leveraged, meaning they used borrowed funds to acquire the employer securities held by the ESOP trustee.
A majority of ESOP companies have other retirement plans, such as defined benefit pension plans or 401(k) plans, to supplement their ESOP.
Of the 11,500 employee-owned companies nationwide, fewer than 5% were financially distressed when they established their ESOP.
Total assets owned by U.S. ESOPS amounted to $600 billion at the end of 2002.
A total of $22 billion in cash or stock was contributed to ESOPs in 2002. This equaled approximately 3.2% of total civilian employee compensation in that year.
Approximately 5% of the total value of U.S. corporate net worth in 2002, approximately $600 billion of sponsor stock, was held in employee stock ownership plans.