22% Increase in Closely Held Company ESOP Participants in Most Recent Data

The Department of Labor (DOL) has posted the latest Form 5500 filing data, which covers plan year 2021 (the most recent available year). The data includes 6,533 ESOPs filing for 2021, covering 14.7 million participants holding over $2.1 trillion in total assets.

The number of unique companies with an ESOP is 6,322 (a company may sponsor multiple plans). See Employee Ownership by the Numbers for a more detailed look at the 2021 ESOP filing data.

The number of ESOPs had been slowly decreasing for several years running, falling from 6,717 in 2014 to 6,467 as of 2020. Much of that overall decline in ESOPs was driven by publicly traded companies, with the number of plans declining 27% for the period from 2014 to 2021.

However, in 2021 we saw an increase that is entirely driven by private companies. The total number of closely held company plans grew by 106 to 5,973, the number of new plans grew from 197 in the prior year to 274 (the second highest increase since 2016), and the number of participants in closely held company ESOPs grew by 443,000 (22%) to 2.35 million.

Looking at the impact of ESOPs on workers and the economy, these plans paid over $175 billion to participants in 2021 and made contributions of over $101 billion. 

There has been an uptick in the size of the typical ESOP since 2014. The median privately held ESOP had 57 active participants (current employees) in 2021 compared to 50 in 2014. Forty-two percent of private ESOPs had more than 100 active participants in 2021, up from 29% in 2014.

As of 2021 filings, there are 4,926 profit-sharing, stock bonus, or other defined contribution plans that are not ESOPs but are substantially (at least 20%) invested in employer stock. These plans cover a little over 776,724 participants.

Commenting on the results, NCEO founder Corey Rosen said, "The increase in participants is probably in part driven by the growing number of acquisitions by ESOP companies. The numbers are particularly impressive given that 2020 was a very difficult year for the economy."