Direct Employee Ownership: Building a Culture & Legacy of Shared Success

Broad-based employee ownership in private US companies, whether for a gradual buyout or a single transaction, is mainly created through trust-based solutions. Usually, this means an employee stock ownership plan (ESOP), with employee ownership trusts as a low-cost alternative that lacks the ESOP’s detailed rules but also lacks its tax incentives. 

Some companies, however, prefer direct employee ownership, where employees personally acquire and own company shares. That generally means a gradual buyout and is especially suitable for certain industries, particularly professional services such as engineering, architecture, and wealth management, and it can work well in other sectors where employees have the necessary risk tolerance and disposable income or the company provides significant contributions.