Employee stock ownership programs (ESOPs), which gained ground in the 1970s, allow employees to become owners of a company without taking on any of the risks that traditional stock ownership comes with.
While ESOPs aren’t widely popular in the U.S., Santa Barbara is home to quite a few of them: Toyon Research, Allen Construction, Pacifica Graduate Institute, Hardy Diagnostics, Frank Schipper Construction Co., and CMC Rescue, to name a few.
“It’s really a long-term business model,” explained CMC Rescue CEO Rich Phillips. “You’ve created a market for the shares of a private company. It’s still private, but you’ve given it sustainability, and you’ve also invested in and changed the culture of the company. Now everybody’s an owner, and that’s quite the shift.”