In this article we are going to list the 15 largest employee owned companies in the world. Click to skip ahead and jump to the 5 largest employee owned companies in the world.
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.
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.