ESOP vs Worker Cooperative

While both Employee Stock Ownership Plans (ESOPs) and worker cooperatives aim to foster employee ownership and promote a sense of collective responsibility among workers, they differ significantly in several key areas, including governance, decision-making processes, and ownership structures. Specifically, ESOPs are structured as trusts that hold company stock on behalf of employees, providing them with an indirect stake in the company’s success. In contrast, worker cooperatives operate under a system of democratic control, where each member has an equal vote, ensuring that all voices are heard and considered in decision-making processes. This fundamental difference in governance not only impacts the way each organization is run but also influences the overall culture and engagement of the employees involved.