Employee Ownership

Like community-owned sports teams, cooperatives and employee stock ownership plans are organizational models that tend to root businesses in their communities. Both ESOPs and coops are powerful tools that give decision making authority to those who will feel the impact of the decisions they make. When authority and responsibility are linked, decisions will likely be made in the best interests of the local community.

Rules:

• Worker Cooperative Statutes for Coops and ESOPs
  While legislation is not necessary to set up a worker cooperative, these statutes create legitimacy, legal certainty and structural guidance for worker coops. In contrast to a typical corporation, which allocates profits on the basis of capital investment, these laws authorize the allocation of profits in accordance with the amount of work performed by members. The laws also provide for internal capital accounts in which members get their profits while the cooperative gets funds for capital investment. More...
  
  
• Organizational Model: Cooperatives
  A cooperative is a business owned and controlled by the people who use its services. It is operated for them on a cost basis, meaning that the co-op is not designed to maximize profits, but rather to provide goods and services at a reasonable price. In most cooperatives and credit unions, each member has one vote in the decisionmaking process regardless of the number of shares owned or the amount of business done in the co-op. More...
  
  
• Organizational Model: ESOPs
  Employee Stock Ownership Plans(ESOPs) have been around since the 1940s, but they became economically attractive to employers only after 1974, when Congress liberalized the rules regarding them. These allowed for significant tax incentives for stock given to employees. In 1974 there were 200 ESOPs in the U.S. By 1998 this had grown to 10,000. More...