DOL: ESOPs Grew by More than 1M Participants in 10 Years

The number of participants participating in employee stock ownership grew to 15.1 million in 2023 from 14 million in 2014, an 8% increase, according to a Department of Labor report released Monday.

The DOL’s Employee Benefits Security Administration issued its research to Congress as part of an update on its initiative to promote employee ownership. The report fulfills a statutory requirement under the worker ownership, readiness and knowledge provisions of the SECURE 2.0 Act of 2022, which directed the DOL to establish an initiative to promote employee ownership and participation.

For comparison, between 2002 and 2013, the total number of ESOP participants increased to 13.9 million from 10.2 million, while the number of plans filed decreased to 6,795 from 8,874, the National Center for Employee Ownership reported in 2015. The total number of ESOP plans stayed relatively steady over the past 10 years, however, with 6,525 reported in 2023.

ESOPs—trusts that allow participants and beneficiaries to hold company shares—are the most widespread form of employee ownership, according to the report. Worker cooperatives—businesses owned and controlled by employees through purchases of membership shares, entitling employees to profit sharing and participation in governance—are fewer, though growing. The number of worker cooperatives more than doubled to 820 in 2024 from 323 in 2014, the research showed.

In addition, the total assets in ESOP plans grew at a considerably faster pace than the number of plans and participants over the decade, increasing by 75% to $314 million in average assets per plan in 2023 from $197 million in average assets in 2014, the report showed.

The report also provided Congress with the initial activities of the EBSA Office of Outreach, Education and Assistance’s Division of Employee Ownership, created in 2023 to provide participant education, informal dispute resolution and compliance assistance. The division’s initial activities included:

• Education, outreach and stakeholder relations aimed at advancing the Employee Ownership Initiative;
• Support for new and existing state ownership programs;
• In-depth technological assistance for employers and employees of employee ownership programs; and
• The January 2025 launch of an initial website for the Employee Ownership Initiative, as well as expansion of the website in January 2026.

The DOL’s report stated that in the future, “subject to available resources”—given appropriations for the initiative have yet to be fully allocated—EBSA aims to further support state employee ownership programs by such avenues as: a grant program run in collaboration with the DOL’s Employment and Training Administration; building out the Division of Employee Ownership team; and expanding information and educational content related to employee-owner engagement, participation and financial well-being.

Assistant Secretary of Labor Daniel Aronowitz, who oversees EBSA, stated in his June 2025 confirmation hearing before the Senate Committee on Health, Education, Labor and Pensions that he would “end the war on ESOPs.” The pledge from Aronowitz resulted in the DOL’s January announcement that ESOPs were “removed from the [agency’s] national enforcement project list.”

Encore Fiduciary, headed by Aronowitz until his DOL appointment, shared analysis with PLANADVISER which found there were 14 lawsuits targeting ESOPs in 2025, all of which alleged improper valuation of company stock or insider benefit from a transaction. There were also 11 settlements of ESOP lawsuits last year, ranging from $450,000 to $84 million.

Both the House and the Senate labor committees have advanced the Retire through Ownership Act, which legal experts said would align ESOP valuations with IRS standards and reduce the valuation and fiduciary risk for ESOP trustees. The bill has been passed by the Senate and awaits a House vote.