Private Equity Continues to Make Inroads into the Employee Ownership Space

Since as far back as at least 2017, we've long been tracking the increased activity of private equity firms in the employee ownership space. Their foray into the world of ESOPs, broad-based equity, stock purchase plans, and the like, is, by now, somewhat old hat, but that doesn't stop it from being a frequent point of conversation, even contention, in employee ownership circles. But the fact remains that, no matter how you feel about their motivations or their methods, they are here, as evidenced by a feature on KKR, Pete Stavros, and Ownership Works on tonight's episode of 60 Minutes.

Although the 60 Minutes episode focuses on the KKR model of broad-based equity compensation, the primary form of employee ownership in the United States, covering almost 15 million people, is the employee stock ownership plan (ESOP). The nearly six thousand private companies with ESOPs have 1.7 million ESOP participants and paid out over $19 billion in benefits in 2021. (See our Employee Ownership by the Numbers.)

If you're looking to get a handle on the possible implications of private equity activity on the employee ownership world, we've made our newsletter article from 2022, Threat or Opportunity? Private Equity and Employee Ownership, available for free to non-NCEO members.

The impact of KKR and similar firms becoming more invested in the world of employee ownership remains to be seen. Through it all, we will continue to provide factual reporting (as in the three links above), as well as expert analysis, like our newsletter article "Private Equity in the Employee Ownership Marketplace," and explanations, like "What Employee-Owners Should Know About Private Equity" (note: both of these articles require an NCEO membership login).