September 1, 2020
California is home to hundreds of companies that offer employee stock ownership plans (ESOPs). These plans ensure that the people working for a company own a piece of the entire organization. It is a company ownership structure that has exploded in popularity in recent years, but how does employee ownership work?
Employee stock ownership plans (ESOPs) are plans in which employees are offered stock in the company they work for as a part of their benefits plan. By giving employees the option to purchase stock in the company they work for, company leadership is ensuring that employees will act in the best interests of the shareholders since they have become shareholders. It is advantageous to both the company and the employees. The company receives tax benefits and ensures that their goals are aligned with the goals of their employees, and the employees receive exclusive and valuable ownership rights.
ESOPs are particularly popular in the state of California. A recent list highlighting 100 of America’s largest majority employee-owned companies included nine California-based companies. The most noteworthy being Parson’s engineering and construction in Pasadena, CA. That company alone employs 1600 people.
If you work at an employee-owned company, you need to think like an owner to maximize your benefits as one. Every decision you make should be for the betterment of the company, as that will ultimately be for your betterment too. Working for an employee-owned company is a great way to gain low-stakes experience as a business owner. It is also a great way to feel more connected to your company and the company’s mission. Employees who own a piece of their company are less likely to be at odds with their employers, which ultimately creates a better working environment for everyone.
If you have any questions about your rights as an employee within an employee-owned company, or if you feel as if something is not right within your employee-owned organization, then contact a labor attorney. The legal team at Para Los Trabajadores is here to offer consults and representation. Call us today with any questions or concerns that you may have. We are here for you.