The Real Strengths Of Employee Ownership
Don't write an obituary for employee stock-ownership plans just yet. Although Congress last year did away with many of the tax incentives that originally sparked corporate interest in ESOPs, they are proving to be more popular than many people imagined. A new study indicates that the total worth of worker-owned stock in public corporations probably exceeds $150 billion, including an average of 12% of the shares of some 1,000 large, publicly held companies that employ 11 million workers.The appeal of ownership programs goes far beyond the tax breaks available to ESOPs. At a time when competitive pressures are forcing companies to keep a lid on labor costs, many are using stock plans as a substitute for cash compensation. Stock is being used to fund bonuses, pension and savings plans, and even retiree medical benefits.
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