Blue Ridge ESOP Associates Industry News

Labor unions have been on the decline for several decades, but lately there has been uptick in interest. Workers are feeling more powerful during the Great Resignation and the corporate battle to find new employees. Many employees feel there have been inequities embedded in corporate America and income inequality is real. Over the past three years, Service Employees International Union (SEIU) Local 500 had added new members like the Maryland Institute College of Art, Howard University and the Democratic National Committee. Employees at Starbucks have moved to organize unions after working conditions worsened during the pandemic. Some think Starbucks has closed several locations due to employee organizers, but Starbucks corporate claimed these locations were in dangerous neighborhoods and were not profitable. These labor union movements have grown in many industries or schools that are not suitable for employee ownership through an ESOP, but some workers should look at an ESOP to help meet their goals.

Employee ownership through Employee Stock Ownership Plans (ESOPs) has stood the test of time and is built to last. ESOP champion elected officials on both sides of the aisle stood up for ESOPs during the 2017 tax reform process and ESOP law is still strong. While private company ESOP growth has not grown tremendously, the number of private company ESOP participants has grown to over 14 million employee-owners with wealth over $1.4 trillion. This tax efficient exit strategy continues to be a viable structure for business owners who value the employees who helped them grow the business and want their legacy to last. Research has shown that employee ownership through ESOPs increases productivity, helps secure a more respectable retirement, and keeps more jobs local. The National Center for Employee Ownership (NCEO) found that ESOP companies have almost 20% more revenue growth than the S&P Small Cap 600. During the last recession ESOP companies enjoyed double-digit revenue growth while other businesses contracted. Employee-owners have over twice the average retirement balance than non-employee-owners and 33% higher income from wages. ESOP companies cover a broad range of industries like Manufacturing (22%), Professional/Scientific/Technology (19%), Finance/Insurance/Real Estate (16%), Construction (11%), Wholesalers (9%), Retails (6%) and almost any other industry you can think of.

Blue Ridge ESOP Associates was proud to be represented again at the Mid-Year Fellows Workshop in Honor of Louis O. Kelso in January. This workshop was organized by Institute for the Study of Employee Ownership and Profit Sharing of the Rutgers University School of Management and Labor Relations. The program is named after Louis Kelso who was a political economist, corporate and financial lawyer, author, and merchant banker. He is widely credited as the inventor and pioneer of the Employee Stock Ownership Plan (ESOP), enabling workers without savings to own stock in their employer company. The purpose of the annual workshop is to study broad-based forms of capital ownership and capital income such as employee stock ownership, equity compensation, profit sharing, gain sharing, and worker cooperatives in the corporation.  The workshop also explores approaches to broadened citizen capital ownership, “second income”, and dividend funds for citizens in the society in the United States.  The workshop provides an opportunity for scholars to present research in progress, receive mutual mentoring and feedback, work on joint research projects and publications, and meet foundation officials and publishers interested in this scholarship.  The workshop convenes members of the research Fellowship Program of the Institute for the Study of Employee Ownership and Profit Sharing from around the globe.

IRS Advisory Committee Asks Practitioners and Service-Providers to Participate by February 1 in Confidential Survey About Elimination of Most Determination Letters (Employee Plans Subcommittee, IRS Advisory Committee on Tax-Exempt and Government Entities (ACT))

Super Bowl Sunday is an American tradition we all enjoy. ESOPConnection™ is becoming another American tradition ESOP companies enjoy. Blue Ridge ESOP Associates was first to market with a custom on-line tool for ESOP companies. ESOPConnection™ continues to get more useful.

Here are 10 reasons you should invest in ESOPConnection™:

Industry-wide trends show that plan participants have significantly increased their use of mobile devices. In response to these evolving technological preferences, Blue Ridge ESOP Associates is pleased to announce that ESOPConnection, the leading online access portal for ESOP participants, is now mobile-ready on over 30 different devices.