6 Successful Companies That Are Employee-owned

In a given year, disengagement in the workplace can cost American businesses as much as $550 billion. This is why many companies have put a lot of effort into keeping their staff motivated. They have done this by not only paying their workers competitive wages but by also giving them an actual ownership interest in the business that they work for. 

As an article published by the Employee Ownership Foundation explains, "Employee-owners have a different attitude about their company, their job, and their responsibilities that make them work more effectively and increases the likelihood that their company will be successful. Fundamentally, employee owners are more accountable for their job performance and their fellow workers' job performance simply because they have a common stake in the success of their company."

One of the most popular ways in which employees become part-owners of their companies is through an Employee Stock Ownership Plan (ESOP). This is usually a trust fund set up by an employer that owns shares in the business for the benefit of its employees. Below, we will take a look at six companies that are significantly owned by their past and present employees.

With 1,112 locations and more than 175,000 employees, Publix Super Markets is one of the country's largest employee-owned companies. During the year 2015, Publix reported gross sales of more than $30 billion as well as a net profit of a little less than $2 billion. This makes the company the ninth-largest privately held company in the United States at the time of writing, according to Forbes Magazine.

Founded in 1930 by George W. Jenkins Jr., the company slowly grew into the most profitable supermarket chain in the nation. All Publix workers, regardless of their position in the company, receive 8.5% of their annual salary in the form of company stock after they have been with the company for more than 12 months and put in more than 1,000 hours of work. In July 2013, the company was valued at around $20.8 billion. As of May 2015, employees of Publix-owned and controlled 80% of the company, while the family of the company's founder owned 20%. (For related insight, read more about the most profitable grocery stores.)

As of April 2016, the NCEO ranked Brookshire Brothers as the 17th-largest company in the United States that is wholly employee-owned. The company owns multiple grocery stores, gas stations, and convenience stores throughout the states of Texas and Louisiana, and currently employs more than 7,000 people.

Lifetouch is another company that is 100% employee-owned. The company provides photography services such as yearbook printing and professional portrait services to schools and families across the country with the help of its more than 20,000 member staff. (Read more about the three brands owned by the S.C. Johnson family.)

Headquartered in Abington, Philadelphia, Alliance Holdings is an unconventional private equity firm that is completely employee-owned through an ESOP. According to the National Center for Employee Ownership (NCEO), Alliance Holdings employs approximately 15,000 people. The firm focuses on acquiring lower-middle market companies and their portfolio currently includes businesses operating in the manufacturing, automotive and specialty finance industry. In addition to receiving an ownership interest in Alliance Holdings, participants of the company's ESOP also become part-owners of each of the company's portfolio companies. 

Robert W. Baird & Co. is another well-established company in the world of finance that is an employee-owned organization. Like Alliance Holdings, Baird invests in lower middle market companies the operate in a wide range of industries. According to the company's website, Baird invests anywhere from $15 million to $35 million in businesses that realize less than $20 million in annual sales, and valued between $25 million and $125 million. In addition to engaging in private equity financing, Baird provides wealth management and investment banking services to both individuals and companies. At the end of 2015, the company's assets under management totaled $151 billion. For that same year, the company reported gross revenues of $1.3 billion and an operating income of $154 million, up 14% from the previous year.

Round Table Pizza is a California-based pizza franchise that has 500 locations across seven states including Hawaii, Washington State, and Alaska. The company was founded with just $1,800 by William Larson in 1959 following the completion of a four-year assignment in the U.S. Navy. After running the company for two decades, Larson began to slowly divest his ownership stake in Round Table Pizza in the year 1979. An ESOP plan was later set up, and the company became a 100% employee-owned enterprise by 1979. (For related reading, see: Is An ESOP Right For Your Business?.)

The existence of an employee ownership program in an organization is a great way to keep staff members motivated, and also keep their interest centered around the overall success of the business. There are many corporations in America that are either wholly or mostly owned by their employees. These corporations are known as employee-owned companies, and they use various programs such as the Employee Stock Ownership Plan (ESOP) to give their workers the opportunity to gradually purchase shares in the company during the duration of their employment. Today, Publix Super Markets is the largest employee-owned company operating in America. The family of Publix's founder collectively own 20% of the company, while the remaining 80% is owned by past and present employees. Some successful companies that are 100% employee-owned include Lifetouch, Alliance Holdings, and Brookshire Brothers.