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Employee share ownership

Aequum focuses on promoting widespread ownership by employees of the businesses in which they work.

Aequum provides the means by which employees can turn their jobs into an investment. 

The “means” we speak of is an Employee Share Ownership Plan or ESOP. 

What is an ESOP?

An ESOP is an ownership transfer instrument. 

ESOPs can also serve as an incentive mechanism making for greater productivity and profitability.  These effects are noticeable especially in companies where a high proportion of employees participate in an ESOP and, through it, own a large slice of the business.

Principally, though, an ESOP is designed to transfer the ownership (in part, or in its entirety) from one set of owners to another - in this case, to the employees.  

Employee ownership - large scale or small

Employee share ownership - and the ESOPs which make it happen -  can be modest in scale and objectives, or it can be more ambitious.

An ESOP can be used to deliver incentives - such as bonuses and profit shares - to encourage commitment to the business and its success, or to promote longevity of service.  Such plans are often designed with only limited ownership objectives in mind. 

Plans like these can be a great starting point.  But they do not engage the full power of employee ownership.  To achieve this, a larger scale ESOP is called for. 

Big picture ESOPs

ESOPs are powerful tools. With an ESOP the employees can buy a big equity stake in their employer's company.

An Employee Share Plan can be used to finance a business with expansion plans.  In return for providing, through an ESOP, the required new capital, the employees get a cut of the action, or an increase in their existing stake.

Ultimately, employees can use an ESOP to buy out the whole of a business - for example, when the owner (or owners) want to execute a strategic change of direction, or when its time to prepare for retirement.

These are the instances when employee share ownership comes into own. 

What follows

What follows is a briefing on ESOPs, about how they work, about their general design principles,  and about how they can be used to meet the objectives of business owners and employees.

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