How Many ESOPs Could There Be?
Executive Director
No one knows the number of companies that are reasonable candidates for ESOPs, but census data provides a place to start. According to the U.S. Census Bureau, there are 534,000 firms in the United States with 20 or more employees, the size most experts agree is a rough minimum for an ESOP to be likely to make sense. ESOPs are not possible at 85,000 of those organizations (including nonprofits and governmental agencies) and are nearly impossible for the 20,000 farms on the list. Another 84,000 are partnerships. These would almost all be medical, law, and accounting partnerships, but a few could be eligible for an ESOP. Based on Manta data, about 100,000 firms with over 20 employees are restaurants. Since their high turnover makes ESOPs difficult, most but not all should be excluded from the count of potential ESOPs.
In other words, a very approximate count of the number of ESOP candidates in the United States is 260,000. The NCEO's current estimate for the number of ESOPs and ESOP-equivalent plans is 10,900, which is 4.2% of the potential pool.