Will the 2020s be the “Decade of the ESOP?”

In an article on Forbes.com , Mary Josephs described the reasons why the 2020s could be the decade of the ESOP.  Ms. Josephs interviewed Corey Rosen, founder of the National Center for Employee Ownership (NCEO) and author of “Ownership:  Reinventing Companies, Capitalism and Who Owns What.” 

Among several other reasons, Mr. Rosen and Ms. Josephs point to the numerous states that have established their own ownership centers.  That is, several states have set aside funds to establish their own, state-run employee ownership centers which exist to educate businesses about the power of employee ownership.  Most notably, Colorado established its center in 2020 and experienced a 100% uptick in expected ESOP transactions.

There is also significant bipartisan federal legislation in the works which would further incentivize business owners to sell to ESOPs and banks to lend into ESOP transactions.  Although one would think that bipartisan political support would be helpful to promote more ESOP-friendly legislation, Mr. Rosen notes that politicians tend to run on topics that differentiate them from their opponents.  So, a topic on which everyone agrees can fade into the background during campaign season.