EQUITY FOR WORKERS: A LEGAL & FINANCIAL PERSPECTIVE

Open Access
Author:
Steimling, Frederick James
Area of Honors:
Interdisciplinary in Finance and Labor and Employment Relations
Degree:
Bachelor of Science
Document Type:
Thesis
Thesis Supervisors:
  • Brian Davis, Thesis Supervisor
  • Brian Davis, Honors Advisor
  • James Alan Miles, Faculty Reader
  • Stanley Morris Gully, Honors Advisor
  • Paul Vincent Whitehead, Thesis Supervisor
Keywords:
  • Employee Compensation
  • ERISA
  • ESOP
  • LER
  • Finance
Abstract:
This paper provides an analytical perspective on Employee Stock Ownership Plans (ESOPs) in the United States. It is hypothesized that employee-owned businesses will outperform industry peers in most measures of a given firm’s health. However, this model of ownership poses some unique risks to employee-owners, who may be willing to forego other forms of compensation and more diversified retirement savings accounts to acquire equity stakes in their firm. This paper will quantify the positive and negative attributes to determine if ESOPs should continue to be promoted by policymakers. There are several ways that current regulations could be improved to better protect stakeholders from “stock-drops” and breaches of fiduciary duties. The paper concludes with a comprehensive policy analysis based on past research and a review of relevant legal cases.