ESOP Formations Outpace Terminations Nationwide
Owners weighing employee ownership should note that new ESOPs have exceeded terminations every year since 2016.
Updated on Nov. 2, 2026 in Jobs — General
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A national study by the Employee Ownership Expansion Network measured $141.8 billion in ESOP distributions paid to workers from 2009 through 2024, with roughly $28.7 billion coming from ESOPs that were winding down. The findings matter for small and mid-sized employers weighing employee ownership as a succession or retention tool.
Why it matters
The study frames employee stock ownership plans as a meaningful source of worker wealth, and it finds that new ESOP formations outpaced terminations in every year from 2016 through 2024. For owners considering succession or retention options, that trend signals growing use of the structure, though the study itself is an advocacy-linked analysis of plan filings rather than a neutral assessment of outcomes.
The study totals $141.8 billion in ESOP distributions from 2009 through 2024, with about $113.1 billion from active plans and $28.7 billion from plans entering termination. Over the same period 3,943 new ESOPs were formed against 3,839 terminations, a net gain in formations that held in every year from 2016 to 2024.
The players
Employee Ownership Expansion Network
A Arlington, Virginia-based organization that promotes employee ownership models and publishes research on ESOP adoption and worker wealth.
Leidos
A large US government services and technology contractor that acquired Dynetics in 2020, bringing the Huntsville, Alabama company's ESOP to a close.
Dynetics
A Huntsville, Alabama defense and technology company whose ESOP distributions serve as the study's detailed case example.
The details
An ESOP is a retirement-style plan in which a company's shares are held in a trust for employees, and distributions are paid out to participants as they leave or as plans wind down. The study traces how those payouts flow from both continuing plans and terminating ones, using a dataset built from Form 5500 filings. A case study of Dynetics, a Huntsville, Alabama company acquired by Leidos in 2020, illustrates the mechanics: its ESOP distributions totaled about $977 million paid to roughly 2,260 participants across 2019 and 2020.
Timeline
• 2009–2024: Study period covering distributions, formations, and terminations of ESOPs.
• 2016–2024: New ESOP formations exceeded terminations in each year.
• 2019–2020: Dynetics ESOP wound down and paid distributions to participants.
• 2020: Leidos acquired Dynetics.
• Late 2025: Survey measured median total household retirement savings of $78,000 among US workers.
Market Landscape
The study's findings place ESOPs within the broader movement toward employee ownership as a succession and retention alternative to outright sale of a business. Its figures on formations outpacing terminations suggest the structure is gaining traction among US employers, though the study is produced by a group that advocates for employee ownership.
Owners weighing succession should compare an ESOP against sale, management buyout, or other transfer options with qualified counsel and an accountant, since plan design and termination timing affect outcomes. Employers already offering or considering ESOPs should track how distribution schedules and plan terminations are handled in their own plan documents.
The takeaway
Employers exploring ESOPs should treat the study's net formation trend as a signal of growing adoption, not as evidence of individual plan results. Calendar a review of your plan documents and distribution rules with qualified counsel before any transfer decision.
Further reading
For broader context on how workers' retirement and ownership stakes are measured, see Jobs — General coverage across the United States.
More information
The full ESOP wealth report and executive summary are available from the Employee Ownership Expansion Network.
Source note: This article includes information reported by InvestmentNews.
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