President Trump and Congress have promised to boost American job stability while giving workers greater control over their economic destinies. Fortunately, Trump’s presidency overlaps with a unique window of opportunity to deliver on these promises. Nearly half of all private businesses are owned by Baby Boomers, which means as older Americans age out of the workforce, many family and locally-owned companies will change hands. Business owners can sell to a competitor, private equity, or go public, but they can also convert to an employee stock ownership plan (ESOP). In short, businesses can become employee-owned, which is consistent with more rapid and resilient job growth.
An S corporation ESOP is a type of retirement plan that converts employees into owners, giving them a stake in their companies’ successes. But perhaps more importantly, Congress authorized the S ESOP to create jobs, generate economic activity, and promote retirement savings; and today, S ESOPs do exactly that. When my company, Burns & McDonnell, transitioned to employee ownership in 1986, it kicked off an era of expansion that helped us grow to more than 5,300 employee-owners today.
Our story is not an isolated case: more than 3,000 S ESOPs together employ 470,000 workers in U.S. industries ranging from manufacturing to consulting, supporting hundreds of local towns and neighborhoods along the way. At many of these companies, job growth has been robust.