In this episode of Work in Progress, I’m joined by Pete Stavros, founder and chair of Ownership Works, a nonprofit leading the employee-ownership movement, whose mission is to provide employees with the opportunity to build wealth at work by making them owners of the company for which they work.
At scale, Stavros says, employee ownership can help millions of lower-income workers and people of color build savings and wealth – often for the first time – at businesses that are more dynamic, resilient, and successful. He says it allows employees to benefit from the value they help create in a business.
“The foundation of it is sharing stock ownership inside of a company with all employees, from the C-suite to the most junior colleagues who just joined the company, maybe working on the factory floor,” explains Stavros.
“If you look at Federal Reserve data on household wealth, and you look at why the top 1% and 10% are in the position that they’re in financially versus the bottom 50%, the biggest driver by a mile is the ownership or lack of ownership of stock assets.
“It’s not housing. It’s not other assets. It’s really ownership of appreciating stocks that has created this massive gulf of wealth inequality, and it’s what the folks at the bottom are lacking. I do not think this is going to solve all of our problems magically, but this is a way to help the bottom half of the country that does not own much in the way of assets. It’s a way of getting appreciating assets in their hands.
“One of the core principles is workers are not investing out of pocket, so they’re not risking whatever savings they do have and they’re not giving up wages or other benefits to get stock. This is a free incremental benefit.”
Ownership Works partners with companies and investors to find what Stavros – who is also co-head of private equity at KKR – describes as “fundamentally good businesses, with solid market positions, but where they’re not fully optimized.”
He adds, “There are ways to accelerate the growth, take more market share in their market, maybe expand into new markets, be more productive, more efficient, et cetera. That’s what we’re looking for. We’re buying the business. We’re investing in the company. And we’re going to make everyone an owner.
“It’s really about creating a different kind of culture – we call it an ownership culture – so people feel a different level of involvement in their business, not just through ownership, but through all of these different mechanisms that create a different kind of culture.
“We mean giving people financial information about the business, helping them understand the business plan and where they’re headed, really driving, measuring and managing to a higher level of employee engagement, teaching financial literacy, getting workers more involved in decision-making.
“It is a long-term effort and it’s got to be the top priority for the leadership team. The number one thing we are doing is we are going to engage employees in a different kind of way, and that is going to help us achieve all of our other objectives, which are secondary to this primary one of treating our people differently.”
Stavros says that, over a period of years, when it is well done, more value is created, benefiting the investors and allowing employees to build wealth at work. “I think this has a real potential across the entirety of the economy.”
Stavros discusses how his father’s career as a construction worker sparked his passion to start Ownership Works, as well as sharing some stories of employees who have built wealth at work from the employee-ownership movement.
You can listen to my conversation with Stavros here, or wherever you get your podcasts. You can also find this conversation and other recent podcasts on our new Work in Progress YouTube channel.
Episode 305: Pete Stavros, founder and chair, Ownership Works
Host & Executive Producer: Ramona Schindelheim, Editor-in-Chief, WorkingNation
Producer: Larry Buhl
Theme Music: Composed by Lee Rosevere and licensed under CC by 4
Transcript: Download the transcript for this episode here
Work in Progress Podcast: Catch up on previous episodes here