Three models of employee ownership: worker cooperative, EOT and ESOP – overcoming barriers – important choices – pros and cons

Abstract

Purpose

The purpose of this paper is to compare three models of employee ownership and to identify pros and cons in relation to how the models can overcome the barriers. Which choices are important when defining the overall rules around the models and the specific possibilities for variations and combinations and what are the pros and cons for these choices?

Design/methodology/approach

The comparison is based on the three main models of employee ownership identified from the country descriptions in this special issue.

Findings

The models do not exclude each other. The models can all be promoted in a specific country, leaving the choice of specific model to the stakeholders involved in the establishment of the employee-owned company. The article also shows the possibility of combining different models and in this way to adjust to specific preferences and conditions – e.g. whether employees and other stakeholders want collective or individual ownership and whether it concerns a start-up or a succession company.

Originality/value

This paper identified the key differences and similarities of different models for employee ownership including pros and cons of worker cooperative vs the Employee Ownership Trust (EOT) and the Employee Stock Ownership Plan (ESOP) models.

Citation

Mygind, N. (2023), "Three models of employee ownership: worker cooperative, EOT and ESOP – overcoming barriers – important choices – pros and cons", Journal of Participation and Employee Ownership, Vol. 6 No. 3, pp. 264-280. https://doi.org/10.1108/JPEO-10-2022-0027