Employee ownership is a very viable model for changing the way that business works. Here's a great story from...

Employee ownership is a very viable model for changing the way that business works. Here’s a great story from…

Reading Time: 1 minute

Employee ownership is a very viable model for changing the way that business works. Here’s a great story from Forbes about WinCo, an employee-owned discount grocery chain that is taking very good care of its employees and their families, many of whom are now millionaires. 

From the article:

“WinCo has more than 400 front line employees with more than $1 million in their ESOP accounts and hundreds of retirees similarly well set. Each year, it sets aside an amount equal to about 20% of each employee’s pay, in the form of stock, and the value of the underlying shares has risen rapidly, too. Retirees can cash out their shares and in fiscal 2015, ending early next year, WinCo will have paid out approximately $200 million to retirees. Over the last seven years, it has paid out almost $1 billion to retirees. Retirees pay the usual federal and state income taxes on these payouts.”

Marjorie Kelly, in her latest book, Owning Our Future, talks about the opportunity to transform a huge chunk of our economy over to this powerful model in the next few decades as baby-boomer business owners retire. 

“A wave of sales of closely held companies is beginning, and it is projected to go on for 20 years. These businesses account for close to half of private sector payroll, and in the last decade, they generated eight out of ten net new private sector jobs. According to a study by White Horse Advisors, only one in seven of these company founders expects to pass the business to family. An “age wave” of ownership transfer is coming.”

HT Seb Paquet

#employeeownership   #ESOP  



  1. That’s awesome.

  2. Man, there’s a lot of details and different models for this. And different state laws. In general terms I am a huge fan of economic democracy (originally an sf term).

    But how are you going to convince these inheritors to sell the companies to the employees to a large degree?

  3. I think the key is, Christof Harper, that it’s not about convincing anyone to do anything, really. My dad runs a manufacturing company in California. He’s got some really bright employees who really are the heart of that company. Would he consider selling out to them if they were able to raise the capital. I have no idea, but I think that there’s no group who would be better aligned with the vision he’s run the company under or more motivated to carry it through. The hard part is raising the money. 

    Interestingly, he’s just about done closing on a smaller firm that they spun out from the current business. He’s selling it…to the guy who manages it. It’s a pretty small firm and he’s not selling it to all the employees, but the reasons I list above were much of the reason he’s selling it to this person, I think. 

    So, really, if the money could be raised, and if you’ve developed strong leadership underneath you, I think this is a very logical path for carrying on the firm. 

  4. There’s something to that for certain cases, yeah. Probably the better answer is for long term employees in a majority (not 3 or 4, or 15% of the company) to buy a large share position. (which is actually what happend with waremart before it became winco)

    Which is one good economic democracy model. Co-ops work well for some businesses. 

  5. Gideon Rosenblatt interesting, didn’t know that about them… thought it was another Walmart. Will have to check them out.

  6. Laura Gibbs I’ve been thinking about this as a model for a cooperative online college, what do you think?  

  7. I know you didn’t ask me, Meg Tufano , but I think the concept has legs, and a functional model could be pulled together with the right pioneers. 

  8. I have developed what is going to be a lifelong antipathy to all bureaucracy at this point in my life. I know it’s terrible to say, but I just want to keep on teaching until I retire and then be done with ANYTHING institutional, good, bad, indifferent. I have no more institutional umph left…

  9. Laura Gibbs has a great point. And that provides depth and breadth to the idea of a Co op college. Because you do need administrative, computer, and other types of cooperators. Co owners.

  10. Gregory Esau Thanks!  I think so too.  Since we actually already DO the work!  ;’)

  11. Laura Gibbs My get up and go may have got up and left too Laura, but what do you think about it as an idea?

  12. Christof Harper I have am amazing array of people whom I know could do the job without top-down admin.  They already do a co-creation as it is. The admin more or less just observes and says, “Good job.”  

    What I’m seeing is that simply ENORMOUS amounts of time could be saved with the organizational means that are now ubiquitous to people like me and Gregory Esau and Laura Gibbs .  The job USED to be important for that kind of IBM factory model college; but that kind of college is just self-destructing at the moment (or, as George Station would say, it is busy rearranging the deck chairs  on The Titanic.)  I think it’s John Kellden who understands the most about co-creation management.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Sign up here for the latest articles. You can opt out at any time.

Subscribe by email:

Or subscribe by RSS:

%d bloggers like this: