Before we start, let’s first establish what an employee owned company is. It doesn’t mean that a company is completely 100% owned by its employees, rather a majority of the company is owned either directly or indirectly by its employees. The manner in which these companies operate generally differ from country to country, but in the US, this is done through an Employee Stock Ownership Plan, where the employees are provided with an ownership interest in the company. These employees are provided with share options of the company, and often don’t have to pay anything up front in order to get these options. On the other hand, this does reduce the salary of such employees since these stock options form part of the remuneration and if the company does not perform well, then the remuneration decreases significantly as well. Generally, these shares are held in a trust and only sold when the employee retires or leaves the company. In some companies, they set a few years after which the employees are free to sell their shares, or if the shares reach a certain price, or the company achieves the targets it has been set.
It is hard to understate the importance of employee owned companies, especially in the US, where wealth inequality has reached its peak. After all, the top 20% of Americans tend to own a staggering 86% of the total wealth in the country while the bottom 80% owned just 14% of the total wealth. This shows how unequal the country is, and the capitalistic nature of the companies operating within, with very little regards to employee wealth. The CEOs of the biggest companies earn hundreds of times the money that the average worker in their own company earns, not allowing them to even fulfil basic necessities, let alone a luxury or two. This is where employee owned companies come in, where instead of just one person hoarding all the wealth, it is distributed among the employees. Right now, around 10% of workers in the US have a stake in their companies, and increasing this number will lead to a higher standard of living and greater stimulation and motivation among employees, thereby encouraging innovation as well. Even companies know the importance of ensuring that staff is motivated and performing well, since worker disengagement tends to cost $500 billion annually in the US alone.
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In the US, this is perhaps the best chance to increase this percentage of ownership. Half of the privately owned companies in the US are owned by Baby Boomers, many of whom are near or crossing the age of retirement. Many of these companies are also among the largest family-owned businesses in the world. These 2.3 million companies employ more than 25 million people or nearly a tenth of the total population of the US. At least a quarter of the owners about to retire in next decade are willing to hand over ownership to employees, and this has seen success in the past with some of the companies in our list earning hundreds of millions of dollars in revenue and being industry leaders as well. Due to the fact that these companies often outperform their competitors and are doing really well, and there are many funders interested in providing the money and capital needed to make this successful. Even now, US non profit organization Heartland Capital Strategies is building a coalition of investors and asset management groups to make use of part of the nearly $13 trillion in worker pension funds in companies which are worker friendly, and can also generate a good return on investment.
Despite the aforementioned activities and the benefits that employee owned companies generate, a lot more awareness is required to ensure that this transition takes place smoothly and to ensure that everyone is aware of the benefits that this will provide. This may even encourage legislation which is more friendly to employee owned companies and hence, can see these benefits accrue even faster. This will happen faster in industries and companies where the workers are part of unions, as unions tend to side with works and work to improve their benefits vastly as well. Members of IAM Maine Lobstering Union recently bought the wholesale activities of Trenton Bridge Lobster Pound, and made it into an employee owned business, saving the decimation of the entire industry while giving workers and employees ownership of their own company as well, thereby bolstering the performance of the company post its takeover. To determine the biggest employee owned companies in the world, we considered the number of employees that each company has, since that is perhaps the single most relevant indicator for such a list. Since many of these companies are not public and are private, their financial information tends to not be available and because of this, we cannot use financial information as a metric. So let’s take a look at the companies which are already at the helm of the next big change in the way that companies operate, starting with number 15:
15. Indian Coffee House
Total number of employees in 2019: 10,000
India Coffee House is a chain of coffee houses run by multiple cooperatives and have over 400 locations. The chain is quite revered historically as it has been the source of many successful political movements.
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14. Davey Tree Expert Company
Total number of employees in 2019: 10,500
As the name suggests, the company is involved in environmental consulting, tree, lawn care and utility services across the United States and Canada.
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13. W.L. Gore & Associates
Total number of employees in 2019: 10,800
W.L. Gore is a global science materials company and was founded 60 years ago in 1960, and currently earns around $3.8 billion in revenue, becoming one of the 200 biggest privately held companies in the US.
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12. Black & Veatch
Total number of employees in 2019: 10,800
It is the biggest engineering firm in the Kansas metropolitan area, and has revenues of over $3 billion. It is engaged in engineering, consulting and construction with a specialization in infrastructure in various markets including water, oil, gas, data centers and smart cities among others.
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11. Arup Group
Total number of employees in 2019: 15,870
The UK and the US have the most entries in the largest employee owned companies in the world, and Arup Group is a UK professional services firm with a presence in 35 countries.
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9. Parsons (NYSE:PSN)
Total number of employees in 2019: 16,000
Parsons is an American defense, security, intelligence and infrastructure engineering firm, first established in 1974. It has a presence in over 24 countries.
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9. Mott Macdonald
Total number of employees in 2019: 16,000
Mott Macdonald is a UK based consultancy company, with a presence in nearly 150 countries across the world.
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7. Houchen Industries
Total number of employees in 2019: 18,000
A grocery store chain, Houchen Industries is now 103 years old, having been founded in 1917 and has sales of nearly $2 billion with around 425 stores.
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7. Amsted Industries
Total number of employees in 2019: 18,000
Amsted Industries is a global manufacturer of industrial parts and is primarily engaged in vehicular, rail road and construction industries. It claims to be one of the leading companies in this industry and has displayed innovation over decades to gain an edge over competitors.
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6. WinCo Foods
Total number of employees in 2019: 19,000
Many employee owned companies are supermarkets for some reason, and WinCo is no exception. This US based company has 129 retails stores and has revenues of $7 billion annually.
5. Penmac
Total number of employees in 2019: 28,000
Penmac Staffing is a company established to connect job seekers with employers, and provides specialized services unique to each individual job seeker. The company started from just one office and is now a major corporation with over 28,000 employees. The company became employee owned in 2010 when its owners transferred the ownership to employees with the aforementioned Employee Stock Ownership Plan.
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4. Mondragon
Total number of employees in 2019: 81,507
It is the biggest employee owned company in Spain by number of employees and in terms of revenue, is by far the biggest employee owned company in Europe. The cooperative has 257 companies which employ over 80,000 people and have revenues exceeding 12 billion euros. It is also the tenth biggest Spanish company when turnover is taken into consideration.
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3. John Lewis Partnership
Total number of employees in 2019: 83,000
It is the biggest employee owned company in the UK, and owns John Lewis & Partners department stores, its banking and financial services, Waitrose & Partner Supermarkets and other retail activities as well. It is the third biggest company in the UK which is not traded on the stock exchange and the chain appeals to upper middle class and upper class shoppers. The company was established in 1929 and was founded on Oxford Street in London.
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2. Huawei
Total number of employees in 2019: 194,000
Huawei is a Chinese technology company, and a very controversial pick in our list, which I’ll get to later. Huawei is involved in the designing, development and sales of technology equipment, and is one of the biggest cell phone manufacturers in the world, providing mid range and high end phones to customers. It has a presence in over 170 countries and annual revenue in 2019 increased to over $121 billion. In fact, in July of this year, Huawei actually beat both Samsung and Apple to become the top smartphone company in the world, despite the sanctions it has had to face by Western countries and in light of Samsung’s sales dropping as the Covid-19 pandemic gripped the world.
These sanctions have come about due to accusations of Huawei supporting the state and links to the People’s Liberation Army as well as concerns by Western powers, and especially the United States, that the telecom infrastructure developed by Huawei could allow the Chinese government to spy on these countries. In addition, Huawei has also been accused of helping the Chinese government in detaining and surveilling its Uyghur Muslim population, which has been the primary reason behind the aforementioned sanctions. This has all culminated in the CFO of the company being arrested in Canada, who is currently out on bail.
Even Huawei’s appearance on this list is controversial. While it alleges to be owned completely by employees, the shares are actually held by a trade committee and the governance procedures of this committee, its members, its leaders and the process of selection of these leaders is all hidden and not accessible to anyone outside of the committee, which purports to hold the shares on behalf of the employees. All this has led to the assertion that Huawei employees don’t actually own part of the company but rather get rewarded for the shares they hold when they leave the company, which then revert back to the company. Despite the controversy, we have included Huawei in our list and leave it to the readers to assess based on available facts and figures whether it is or not an employee owned company.
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1. Publix Supermarkets
Total number of employees in 2019: 207,000
Topping the list of the 5 largest employee owned companies in the world is Publix Supermarkets, which is based in the USA. The company is 90 years old and is headquartered in Florida. Throughout the decades, the company has continued to be owned by members of the Jenkin family, who were the founders as well as past and present employees of the company too. The company has over 1,200 locations across the US and is the only employee owned company to have more than 200,000 employees. The company is one of the 100 biggest companies in the US regardless of ownership or industry, and is one of the biggest private companies in the US as well, surpassing most of those which are not owned by employees. Publix had revenues of over $38.1 billion in 2019 with a net income exceeding $3 billion. It is one of the very few companies which have been named in Fortune’s 100 Best Companies to Work For every year since its inception 22 years ago in 1998.
See also: 11 companies with the most employees in US and 15 largest private employers in the world
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Disclosure: No positions. 15 Largest Employee Owned Companies in the World is originally published on Insider Monkey.