than 200 employees have been sold primarily to their work forces. The average ownership by nonmanagement employees is about 55 to 65 percent. Employees hold their stock as individuals and, so far, relatively few have decided to sell. In the future, many of these enterprises are likely to be sold in whole or in part to investors or other companies unless legal changes are made.

China: Millions of employees are becoming owners in their companies, and both the central and local governments are seriously e

The global business community is recognizing the benefits of employee ownership, from tax savings to improved work performance, as more major firms worldwide offer stock as compensation.

This material is drawn substantially and directly from the National Center for Employee Ownership, a nonprofit membership and information organization in Oakland, California.

Employees have become major players in capital ownership worldwide through employee stock ownership plans (ESOPs), according to a new analysis. Touted as the “the ultimate instrument of corporate finance,” a well-designed ESOP successfully accomplishes major corporate goals to provide owners with a superb return on capital investment, unequalled tax advantages and rewards long term loyal employees far better than the common retirement plans, such as 401(k) and profit sharing plans. Rewards, such as stock appreciation, are quantifiable, but there also is what can be called the “adventure reward.”

According to the Arizona ESOP Group LLC , employees who share in equity appreciation begin to think and act like owners, and owners always work harder than employees do. To illustrate, Home Depot’s stock ownership program created more than 1,000 millionaires in 1998, according to Bernard Marcus, cofounder of Home Depot. Statistics reveal that 17 to 18 million U.S. employees now own from $650 million to $1 trillion in stock through employee stock ownership plans, 401(k) plans and broad-based stock options, and the appreciation potential is dramatic.

Global Growth

The worldwide business community is recognizing the beauty of sharing equity with employees. As impressive as the growth of employee ownership in the United States has been, there have been even more striking developments abroad. The most important are:

Russia: Most large enterprises in Russia have been sold to their work forces, while thousands of other businesses have become employee owned in other formerly socialist countries. Enterprises with more than 200 employees have been sold primarily to their work forces. The average ownership by nonmanagement employees is about 55 to 65 percent. Employees hold their stock as individuals and, so far, relatively few have decided to sell. In the future, many of these enterprises are likely to be sold in whole or in part to investors or other companies unless legal changes are made.

China: Millions of employees are becoming owners in their companies, and both the central and local governments are seriously ex

to a new analysis. Touted as the “the ultimate instrument of corporate finance,” a well-designed ESOP successfully accomplishes major corporate goals to provide owners with a superb return on capital investment, unequalled tax advantages and rewards long term loyal employees far better than the common retirement plans, such as 401(k) and profit sharing plans. Rewards, such as stock appreciation, are quantifiable, but there also is what can be called the “adventure reward.”

According to the Arizona ESOP Group LLC , employees who share in equity appreciation begin to think and act like owners, and owners always work harder than employees do. To illustrate, Home Depot’s stock ownership program created more than 1,000 millionaires in 1998, according to Bernard Marcus, cofounder of Home Depot. Statistics reveal that 17 to 18 million U.S. employees now own from $650 million to $1 trillion in stock through employee stock ownership plans, 401(k) plans and broad-based stock options, and the appreciation potential is dramatic.

Global Growth

The worldwide business community is recognizing the beauty of sharing equity with employees. As impressive as the growth of employee ownership in the United States has been, there have been even more striking developments abroad. The most important are:

Russia: Most large enterprises in Russia have been sold to their work forces, while thousands of other businesses have become employee owned in other formerly socialist countries. Enterprises with more than 200 employees have been sold primarily to their work forces. The average ownership by nonmanagement employees is about 55 to 65 percent. Employees hold their stock as individuals and, so far, relatively few have decided to sell. In the future, many of these enterprises are likely to be sold in whole or in part to investors or other companies unless legal changes are made.

China: Millions of employees are becoming owners in their companies, and both the central and local governments are seriously e

Group LLC , employees who share in equity appreciation begin to think and act like owners, and owners always work harder than employees do. To illustrate, Home Depot’s stock ownership program created more than 1,000 millionaires in 1998, according to Bernard Marcus, cofounder of Home Depot. Statistics reveal that 17 to 18 million U.S. employees now own from $650 million to $1 trillion in stock through employee stock ownership plans, 401(k) plans and broad-based stock options, and the appreciation potential is dramatic.

Global Growth

The worldwide business community is recognizing the beauty of sharing equity with employees. As impressive as the growth of employee ownership in the United States has been, there have been even more striking developments abroad. The most important are:

Russia: Most large enterprises in Russia have been sold to their work forces, while thousands of other businesses have become employee owned in other formerly socialist countries. Enterprises with more than 200 employees have been sold primarily to their work forces. The average ownership by nonmanagement employees is about 55 to 65 percent. Employees hold their stock as individuals and, so far, relatively few have decided to sell. In the future, many of these enterprises are likely to be sold in whole or in part to investors or other companies unless legal changes are made.

China: Millions of employees are becoming owners in their companies, and both the central and local governments are seriously e

s dramatic.

Global Growth

The worldwide business community is recognizing the beauty of sharing equity with employees. As impressive as the growth of employee ownership in the United States has been, there have been even more striking developments abroad. The most important are:

Russia: Most large enterprises in Russia have been sold to their work forces, while thousands of other businesses have become employee owned in other formerly socialist countries. Enterprises with more than 200 employees have been sold primarily to their work forces. The average ownership by nonmanagement employees is about 55 to 65 percent. Employees hold their stock as individuals and, so far, relatively few have decided to sell. In the future, many of these enterprises are likely to be sold in whole or in part to investors or other companies unless legal changes are made.

China: Millions of employees are becoming owners in their companies, and both the central and local governments are seriously e

than 200 employees have been sold primarily to their work forces. The average ownership by nonmanagement employees is about 55 to 65 percent. Employees hold their stock as individuals and, so far, relatively few have decided to sell. In the future, many of these enterprises are likely to be sold in whole or in part to investors or other companies unless legal changes are made.

China: Millions of employees are becoming owners in their companies, and both the central and local governments are seriously exploring the idea of large scale enterprise reform through employee ownership. Several local governments have sold off most of their enterprises to employees, and the central government now is seriously investigating implementing employee ownership on a wide scale.

Eastern Europe and Former Soviet Republics: Most of these countries have provisions to encourage at least minority employee ownership in privatized enterprises. In some countries, particularly Slovenia, Hungary and Poland, hundreds of enterprises have become majority employee owned.

England: Legislation similar to U.S. ESOP law has been in place since the late 1980s. Recent changes have made it more attractive and several hundred companies now have broad ownership. A few dozen large companies now are majority employee owned.

Canada: Most Canadian provinces have legislation providing substantial tax credits (up to 40 percent) for investment in employer stock. Several hundred companies have taken advantage of this process.

Jamaica: A 1994 law in Jamaica provides strong incentives for companies to share ownership with employees.

Japan: Ninety percent of Japan’s publicly traded firms provide mechanisms for employees to buy company stock. Participation in these plans extends to most employees, and the average per-employee holding is about $16,000. However, these plans generally result in employees owning only about two to three percent of their firms.

ESOP Beginnings

The trend toward employee ownership started in the United States in the 1970s, when ESOPs were given specific tax benefits and regulatory guidelines. Today, more than 11,000 of these and similar plans cover almost 9 million employees who own about $213 billion in assets. ESOPs can be found in major firms like United Airlines and Home Depot. Thousands of smaller, closely held companies also sponsor ESOPs. Employees can own anywhere from a few percent to 100 percent of the company.

In recent years, there has been an explosive parallel growth in empl