Employee ownership pays off

There must be an old adage that goes something like this: "The more you own of something, the more you're bound to take care of it." According to the just-released North American Employee Ownership Survey, such is the case with employee-owned companies.

The poll of 471 firms with an employee stock ownership plan (ESOP) found that since becoming employee-owned:

*About 75% increased sales, profits, and stock price.

*70% experienced growth in number of employees.

*Roughly 50% saw improvements in customer satisfaction, quality of product or service, and overall employee relations.

In the US, the number of ESOP companies has grown from 200 in 1974 to approximately 10,000 in 1998, employing 10 percent of the American workforce (about 10 million people).

Another measurement of the success of employee ownership is stock values. Between 1992 and 1998, the American Capital Strategies' Employee Ownership Index (EOI) outperformed the Dow. The EOI's cumulative stock appreciation was 193.2 percent. The Dow gained 145.5 percent in the same period.

"The fact that the [EOI] Index consistently beats the market demonstrates how ... employee ownership is associated with superior financial returns for both investors and employees," says American Capital Strategies' chief executive Malon Wilkus.

(c) Copyright 2000. The Christian Science Publishing Society

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