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Suggest a titleParticipant Rights in an ESOP
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Suggest questionDavid Solomon of Levenfeld Pearlstein (https://www.lplegal.com/people/david-b-solomon) explains what happens when a company becomes ESOP owned as it relates to the day to day operations and the decisions employee owners are now part of (if any). Go to to see the entire Intentional Growth Podcast with host Ryan Tansom discussing ESOPs with David Solomon and Steve Storkan of the Employee Ownership Expansion Network.
Transcript from YouTube captions. May contain errors.
again maybe why there aren't as many asaps as there should be is because there is this lack of understanding about what rights the employees actually have when they own stock and that's a common objection we get is you know I do an ESOP and my employees are going to have access to our financial records and know what the owners make and what kind of car they fork truck driver forklift truck driver is going to be making strategic decisions Etc right correct correct but and that and that's one of the things where where we we we try to be we we acknowledge the question we acknowledge the the the the sort of trepidation of having that you know putting the the the the fox and the hen house so to speak that it's really not what eseps are all about in ESOP and the stock inside the ESOP is owned by the trust not by the individual employees so there's one shareholder when you have one you have 100 you own ESOP owned company there is one shareholder it's esep trust it's not all the the interests of the employees though they're what we call beneficiaries or beneficial interest holders so they have the right to the economic value of the stock but under except under very limited circumstances they have no no rights to governance or any special information other than the value of the investment that's been made for them thank you
About Employee Ownership Expansion Network
The Employee Ownership Expansion Network is a national nonprofit focused on significantly expanding employee ownership across the United States by establishing and supporting a network of independent nonprofit State Centers for Employee Ownership. We see employee ownership as a critical tool in reducing poverty, increasing community wealth, and creating a more vibrant, participatory economy.
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