#369: Reinventing Capitalism: Founder of the National Center of Employee Ownership (NCEO) Corey Rosen

In today's new episode of the podcast, Corey Rosen, the founder of the National Center for Employee Ownership and author of "Reinventing Capitalism," unpacks the current opacity of business ownership in America where equity is largely held by big corporations and large institutional investors. Corey explains the transformative power of Employee Stock Ownership Plans (ESOPs) and how they can be used as an antidote to some of the issues we face today. We have covered ESOPs extensively over the years. This episode is special because I was honored to have one of the founding pioneers of employee ownership share his journey and perspective.

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Key Takeaways:

1.Employee Ownership is Bipartisan: Believe it or not, employee ownership is a rare bipartisan issue that offers incredible tax advantages for both business owners and employees. With benefits like deferred taxes for sellers and equity for employees funded by the company's cash flow, it's a win-win situation that's not just smart business, but also smart policy.

2.Employee Ownership Benefits all Stakeholders: Employee ownership isn't just an ethical move; it's a financial game-changer that creates a win-win for everyone from employees to sellers. By giving workers a stake in the company, we're not only addressing societal issues like wealth inequality but also empowering business owners to cash in on their life's work without dismantling their legacy.

3.Employee Ownership Fosters Personal Growth: Employee ownership fosters productive, self-confident, curious learners, and entrepreneurs—qualities crucial for maintaining the entrepreneurial and innovative spirit of our country.

Bio:

Corey Rosen is the founder of the National Center for Employee Ownership, a private, nonprofit membership, information, and research organization. He cofounded the NCEO in 1981 after working five years as a professional staff member in the U.S. Senate, where he helped draft legislation on employee ownership plans. Prior to that, he taught political science at Ripon College. He is the author or co-author of over 100 articles and numerous books on employee ownership, including (with John Case), Ownership: Reinventing Companies, Capitalism, and Who Owns What (Berrett-Kohler, 2022). He has a Ph.D. in Political Science from Cornell University.

Interview Quotes:

12:37 - “One way we could change is by making the corporation itself a more democratic organization. I don't mean that the employees are electing the board and running the company, but that they have voice and that somebody will listen to them about their ideas.” - Corey Rosen

20:21 - "So you have a system, highly concentrated wealth and very short-term focus." - Corey Rosen

23:00 - “Well, it's bad for their health to feel that economically insecure." - Corey Rosen

30:50 - "It's about creating opportunities for the ownership of future wealth. It's not taking anybody's wealth away." - Corey Rosen

34:00 - "I realized that if I shared ownership with the people I was working with, they would help me grow the company and I would own a smaller piece of a much bigger pie." - Corey Rosen

01:06:37 - “Companies with ESOPs grow about 2 and 1 1% per year faster than would have been expected.” - Corey Rosen

01:23:35 - “If you go to our conferences you'll see a lot of excited people who will just like leading employee ownership companies a whole lot better it's more fun than leading a conventional company.” - Corey Rosen