The founder of 40 Million Owners presents a powerful case for the economic and social value of a shared ownership strategy.

When Bob Moore, co-founder and CEO of Bob’s Red Mill, passed away in February 2024, he left behind more than just a successful whole-grain foods brand — he left a legacy of employee ownership. In 2010, he made the bold decision to transfer 100% ownership of the company to its 700 employees through an Employee Stock Ownership Plan (ESOP). Before his passing at age 94, Moore repeatedly turned down acquisition offers from major corporations, choosing instead to ensure that the Milwaukie, Oregon-based company, which had surpassed $100 million in revenue, remained in the hands of the people who helped build it.

Bob Moore didn’t just build a successful brand — he built a legacy of ownership that transformed his employees’ financial futures. His decision to transition the company to employee ownership through an ESOP serves as a model for how businesses can create lasting value for both employees and communities. The company saw significant market share gains, revenue growth and increased employee retention, demonstrating the tangible benefits of shared ownership. The typical ESOP payout for employees at Bob’s Red Mill is substantial, with the average retirement account value exceeding $300,000 per employee.

For decades, industry leaders and policymakers have sought solutions to one of the nation’s most persistent economic challenges: the widening wealth inequality gap. Despite countless strategies, few have delivered lasting impact. However, a growing movement toward employee ownership — alongside the emergence of new models and structures — offers a promising breakthrough.

Business owners seeking flexible exit strategies that preserve their company’s legacy and values while unlocking the benefits of employee ownership are increasingly turning to Employee Ownership Trusts (EOTs), partial ESOPs, phantom stock plans and other hybrid ownership structures, all of which offer customized solutions for succession planning, wealth distribution and long-term business sustainability. By lowering barriers to adoption, these innovative models harness market forces to empower workers to share in the success they help create, unlocking broad-based wealth creation and transforming industries into engines of shared prosperity. By adopting shared ownership strategies, businesses can redefine responsible, community-focused employment.

Employee ownership models aren’t only gaining traction because they address the country’s wealth gap; employee ownership models are growing because they create tangible value. These models drive stronger financial performance, enhance worker engagement and secure long-term business resilience, benefiting employees, owners and investors alike. While employee ownership has long been a part of the business landscape, it is now emerging as a transformative strategy poised to become a game-changer for American companies and the economy as a whole.

Employee Ownership: A Force Multiplier

In business and finance, force multipliers create leverage that, in turn, enhances value creation. Employee ownership is a force multiplier, driving higher productivity, stronger financial performance and long-term stability. Employee-owned companies consistently outperform competitors in profitability, resilience and retention, making them more attractive to investors while creating real wealth for workers. In industries where labor is essential and margins are tight, this model aligns all stakeholders around a common goal: maximizing the value of the business to the benefit of all.

Employee ownership aligns the interests of workers and management, reduces turnover and boosts productivity. Studies from the National Center for Employee Ownership (NCEO) show that companies with employee ownership plans outperform their peers on key financial metrics, demonstrate higher rates of worker engagement and are more resilient during economic downturns. Furthermore, broad-based ownership structures can reduce wealth inequality, which is a key to our nation’s future.

Given these figures, it is not surprising to see that businesses in multiple industries are embracing employee ownership as a viable pathway to economic stability and growth. Given the thousands of small and mid-sized companies active in various sectors, the opportunity to implement employee ownership strategies can drive long-term success while fostering more equitable wealth distribution.

Employee Ownership Is a Model for the Modern Company

Employee ownership is rapidly emerging as the new baseline for the modern company. The business case has been extensively researched and thoroughly documented by a network of nonprofits, research institutions, think tanks, philanthropists and government agencies, all committed to advancing shared ownership as a strategy for stronger businesses, more equitable wealth distribution and long-term economic resilience. Long-time leaders — such as the NCEO, Project Equity, Democracy at Work Institute, and the Rutgers Institute for the Study of Employee Ownership and Profit Sharing — have been at the forefront of this movement, advocating for policies and providing resources to support the adoption of employee ownership across a variety of industries.

Federal and state-level initiatives also increasingly incentivize employee ownership through subsidies, tax credits and dedicated support programs. States like California, Colorado and Washington have introduced legislation offering significant financial support. For example, Colorado’s tax credit of up to $150,000 for employee ownership conversions reduces the financial burden on businesses during the transition.

With labor shortages expected to intensify over the next decade, businesses that fail to invest in their workforce will not only struggle with employee well-being and satisfaction but also with staying competitive in a tightening talent market. The U.S. had 7.74 million job openings and only 6.98 million job seekers as of late 2024, according to Jeffrey Korzenik, chief economist at Fifth Third Bank. This mismatch between job openings and available workers highlights the ongoing labor shortage issue. Employee ownership has emerged as a potential solution to this problem and a secret weapon in the battle for talent.

The strongest testament to the value of employee ownership in the market context is its growing popularity within the private equity sector. As of the end of 2024, KKR, under the leadership of Co-head of Global Private Equity Pete Stavros, has implemented employee ownership structures in 56 portfolio companies worldwide. KKR has shown that granting ownership stakes to employees can be a powerful driver of value creation — not only for workers but also for investors.

In addition, Stavros and his wife funded the creation and launch of Ownership Works, a nonprofit dedicated to scaling these practices throughout the large-cap private equity sector. Since its launch in April 2022, Ownership Works has partnered with 32 private equity firms that, collectively, manage $1.061 trillion in assets. The organization has helped generate more than $570 million in wealth for workers, with $176 million of that wealth going to low- to moderate-income workers. With millions of small businesses on the verge of succession and a labor market struggling to retain talent, employee ownership isn’t just a compelling idea — it’s a necessity. The private equity world is taking notice, and forward-thinking business leaders should, too.

A Call to Action for Business Leaders

The stakes are high. Businesses shape the nation’s economy and workforce, and those that embrace employee ownership can set a new standard for capitalism — one that values workers as true partners and contributors to success. Employee ownership is not just an idealistic vision; employee ownership is a roadmap for aligning business success with worker prosperity, proving that profitability and shared wealth are not mutually exclusive, but mutually reinforcing.

For business leaders ready to act, the path forward is clear. Start by educating yourself on employee ownership structures like ESOPs, EOTs, worker cooperatives and broad-based equity models to determine the best fit for your company. Explore financing options that can facilitate an ownership transition, ensuring financial viability without disrupting operations. Engage advisors who specialize in structuring successful employee ownership models, providing the expertise needed for a smooth transition. Most importantly, initiate conversations with employees and leadership teams about the company’s long-term vision and how ownership can create greater stability, engagement and shared success.

As businesses navigate an evolving economic landscape, business leaders should embrace employee ownership not as an unconventional exit strategy but as a proven, high-performing model that simultaneously strengthens companies, enhances workforce engagement and fosters a more resilient and equitable economy for all.

Building the Next Generation of Employee-Owned Businesses

For those asking, “What are you doing beyond writing about this?”: We’re not just advocating for employee ownership, we’re actively building it. My partners at Southeast Acquisition Capital and I are forming an employee-owned holding company in the food and beverage industry, using an innovative ESOP buyout model. This approach gives business owners a competitive, values-driven exit strategy that preserves their company’s legacy, culture and workforce while also ensuring long-term stability through employee ownership. By embedding ownership and shared success at the core of our model, Southeast Acquisition Capital is set to disrupt the lower-middle market, proving that employee ownership doesn’t just work — it outperforms, benefiting companies, workers and communities alike.

Beyond that, we are launching 40 Million Owners, a firm dedicated to helping business owners and existing ESOPs design and execute value-creation strategies powered by employee ownership. Our mission is to expand access, provide expertise and accelerate the transition to broad-based ownership for the 40 million employees working in the lower-middle market.

What we’re doing is just one piece of a larger movement to increase employee ownership and create more opportunities for shared success in American businesses. By addressing the widening wealth gap, we’re tackling a fundamental driver of division and instability in our society. For business owners contemplating succession or investors seeking long-term, sustainable value creation, now is the time to engage with this transformative model.