Employee Ownership 101
The Future of Your
Business Belongs
to Your People
Employee ownership is a proven path to business succession, workforce wealth, and lasting community impact. Three models. One mission. Let's find yours.
Employee ownership is as much a journey as it is a destination. Whether you're a business owner planning your exit or an employee ready to own your future, WICEO is here to guide you — every step of the way.
Employee Stock
Ownership Plan
An ESOP is a qualified retirement benefit plan that gives workers an ownership stake in the company they work for. A trust holds shares on behalf of employees, allocating them over time based on tenure or compensation.
For selling business owners, an ESOP provides a tax-advantaged exit that preserves the company's culture, independence, and workforce. It's the most established and well-regulated form of employee ownership in the United States.
ESOPs are particularly well-suited for profitable companies with 20 or more employees where the owner wants to sell some or all of their interest while maintaining business continuity.
Employee
Ownership Trust
An Employee Ownership Trust (EOT) is an independent trust that holds a controlling interest in a company permanently on behalf of its employees. Unlike an ESOP, employees don't hold individual share accounts — instead, the company is steward-owned by the trust for the long-term benefit of all workers.
EOTs originated in the UK and are growing rapidly in the U.S. as an attractive alternative for business owners who prioritize mission preservation, cultural continuity, and equitable profit-sharing over maximizing personal exit value.
This model works especially well for smaller businesses, professional service firms, and companies where the founder wants to ensure the business never falls into extractive private equity hands.
Worker
Cooperative
A Worker Cooperative is a business owned and governed directly by its employees. Each worker-member holds an equal vote in major business decisions and shares in the profits and risks of ownership in proportion to their labor contribution.
Co-ops are among the most democratic business structures available, distributing both economic rewards and governance power directly to the people doing the work. They have a long, proven track record globally — from the Mondragon Corporation in Spain to thousands of small businesses across the U.S.
Worker co-ops are an excellent fit for startups, conversions, and collective-minded organizations seeking the most direct and participatory form of employee ownership.
Comparing Ownership Models
| ESOP | EOT | Worker Co-op | |
|---|---|---|---|
| Best For | Profitable businesses, 20+ employees, owner seeking tax-advantaged exit | Mission-driven businesses, founders prioritizing culture over exit value | Democratic startups, conversions, collectively-minded teams |
| Ownership Structure | Trust holds shares; employees have individual accounts | Trust holds company for collective benefit; no individual accounts | Employees own shares directly as member-owners |
| Governance | Traditional management; board may include employee reps | Independent trust with employee voice; management retained | One member, one vote; democratic control of the business |
| Employee Benefit | Retirement account funded by company contributions | Profit-sharing bonuses; no individual equity stake | Patronage dividends + equity stake + voting rights |
| Tax Advantages | Major — sellers may defer/eliminate capital gains; S-corps pay no federal tax | Moderate — growing federal and state incentives | Moderate — co-ops have access to various tax treatments |
| Setup Complexity | High — requires legal, valuation, trustee, and often financing | Moderate — simpler than ESOP, still requires legal counsel | Low to Moderate — straightforward for small groups; scales with complexity |
| Typical Size | Mid-size to large (20–500+ employees) | Small to mid-size (5–200 employees) | Any size — from 2 to thousands of members |
| Future Sale Possible? | Yes, with trustee approval | No — structure is designed for permanent independence | Yes, with member vote |
The Employee Ownership Journey
Every ownership transition is unique, but most follow a similar path. WICEO is here to guide you through each phase.
Explore Your Options
Learn the differences between ESOPs, EOTs, and Co-ops to determine which model aligns with your goals, values, and business structure.
Connect with Advisors
Work with qualified legal, valuation, and financial professionals. WICEO can connect you with specialists active in Wisconsin.
Feasibility & Planning
Assess whether your business is a strong candidate. Evaluate financials, ownership structure, and employee readiness.
Complete the Transition
Execute the transaction, communicate with employees, and launch the programs that make ownership real and meaningful.
Ready to Take the Next Step?
WICEO is Wisconsin's dedicated resource for employee ownership education, connections, and support. We're here to help you find the right path.
Talk to a Professional
Get connected with experienced ESOP, EOT, and co-op advisors active in Wisconsin.
Get Connected →Ownership 101
New to the concept? Start with our introductory resources to build your foundation.
Start Learning →Contact WICEO
Reach out directly. Our team is here to answer questions and point you in the right direction.
Reach Out →
Explore the NCEOX Initiative
Get the resources you need to make the right decision for you and your company. The National Center for Employee Ownership (NCEO) is the premier organization for education, research, best practices, and networking for those interested in ESOPs and employee ownership.
We are proud to offer a 6-month free NCEO membership
through the NCEOX Initiative so you can explore the benefits of employee ownership for your company at your own pace.
EMPLOYEE OWNERSHIP IS WORTH INVESTIGATING
The next step is to get advice and learn how to start your journey to employee ownership.
