ESOPS and the Employee Ownership Culture

The 1990s have seen a definite increase in the use of stock based compensation programs for employees at all levels. This article illustrates how the development of an employee-ownership culture, which includes the use employee stock ownership plans, has a significant impact on the original founding shareholders and the issue of control. It also explains the effectiveness of stock based incentives in increasing motivation and productivity and in achieving other corporate goals. A variety of compensation alternatives, including stock based qualified retirement programs, direct ownership alternatives and phantom stock plans, all have advantages and disadvantages, depending on the specific business situation. The utilization of a performance based compensation alternative, however, acts as a positive force for the business and its employees.