NBC News Covers Employee Ownership and NCEO Research

On February 1, the evening NBC News Now is running the story “When workers are owners, they often get better benefits and a chance to build wealth. Some even build million-dollar retirement accounts.” NBC News hosts a web version of their reporting that includes both the video segment and a text version by Gretchen Morgenson and David Paredes.

The story features employee-owned companies Johnny’s Pizza House, McKay Nursery, MMC, and AArete. It covers results from an NCEO research report commissioned by Employee-Owned S Corporations of America (ESCA) that found “retirement accounts of workers at employee-owned companies are on average twice as large as those held in 401(k)s at traditional companies—$132,000 versus $64,000.” That study had not been released before the NBC broadcast.

The NBC story included interviews with employees at the companies. Denise Pouncy of Johnny’s said, “Johnny’s is the best company to work for…You meet new people, you have great bosses and leadership—they take the time to know their employees. And when I get ready to retire, I know I’m going to be comfortable.”

Felimon Chairez, a documented migrant worker at McKay with a six-figure ESOP account, said, “The company is doing good, so I feel happy about it…I feel lucky that I got involved in this program. I’ve been watching many people retire, and I know very many people that retire happy.” McKay has included migrant workers over the decades it has been an ESOP, providing a more secure future for hundreds of people.

The video and text extensively quote Joseph Blasi, the Director of the Institute for the Study of Employee Ownership and Profit Sharing at Rutgers University.

The NCEO/ESCA research broke new ground in using the data on all qualified retirement plans in the US to create a dataset of all S corporation ESOP companies and a meticulously matched group of comparable non-ESOP companies with a 401(k) plan. The positive advantage for ESOPs did not disappear when researchers simultaneously controlled for the characteristics of these companies available in the data (industry, size, and region): the differences were not simply a function of ESOPs being more or less prevalent among certain types of companies, for instance. This statistical analysis comparing 2019 to 2020 provides evidence that ESOP companies were more likely to retain or increase their employment (as measured by participants in their plans) compared to the comparison companies in the time of the Great Resignation.

Update: On February 2, the NCEO and ESCA released more of the research results. See this blog post for links to a press release, the full results in slide format, and a short video discussing the implications of the research.