How Employees at ESOP Companies Can Help Increase the Value of Their ESOP Shares
When you work at an ESOP company, you’re not just an employee—you’re also an owner. That ownership comes with a powerful incentive: as the company becomes more valuable, so does your ESOP account.
And ESOP contributions are often a significant investment made by the company. In fact, our recent benchmark found that the average company contributes nearly $10,000 per employee per year.
Given the size of this investment and the effort involved in running an ESOP, it’s critical that companies generate a strong return on that investment. One key way this happens is when employees recognize and act in line with being owners—not just employees.
The good news? Employees at ESOP companies actually have a lot within their control that can influence the share price.
A Quick Primer: How ESOP Shares Are Valued
Each year, an independent valuation firm determines the value of your company’s stock based on financial performance, industry trends, risk factors, and future outlook. That stock value directly impacts the value of your ESOP account.
So, if the company becomes more profitable and operates efficiently, the share price typically goes up—and so does your retirement benefit.
How Employees Can Help Increase Share Value
1. Use Zero-Based Budgeting
For employees or managers who have oversight or influence over budgets, one powerful strategy is zero-based budgeting. Instead of copying last year’s budget and rolling forward the same expenses, start from zero each year and have your team justify each line item.
Large organizations often fall into the trap of spending to "protect" budget line items, even if those expenses no longer move the business forward. Zero-based budgeting helps eliminate unnecessary spending and redirect resources more effectively.
2. Share Financials Transparently and Highlight Savings
Sharing financial information with employees, highlighting examples of when employees have identified savings opportunities, and connecting it to share value does two things:
- It educates employees on how savings and efficiency impact the ESOP share price and overall performance, so they become more mindful of spending and saving day to day
- It empowers them to think and act like owners—spotting waste, suggesting improvements, and understanding their role in the company’s financial health
After implementing this on a monthly basis with our team at Certified EO, one team member immediately identified an expense we could cut in half, which resulted in thousands of dollars of savings per year for the business.
3. Educate Your Team on How You Measure ROI of Investments
A few months ago at Certified EO, we used a recent research report to significantly increase our conversations with ESOPs at a conference—for only a few thousand dollars.
We then walked the team through how we calculated the average value of each intro call and demonstrated the ROI of that investment.
That transparency helped our team understand how management evaluates spending and return. Soon after, an employee identified a similar opportunity. They presented a short write-up outlining the cost and expected ROI. We moved forward with it—and it delivered a 5x return for the business.
When employees understand how ROI is measured and are encouraged to think this way, it builds a culture where everyone is on the lookout for high-impact opportunities.
By thinking like owners, being mindful of costs, and looking for ways to improve results, employees can directly influence the value of their ESOP shares. The more you educate, empower, and celebrate that mindset, the stronger your ownership culture—and the more value you’ll create together.
