EO Buyout – Emerging Impact Theme Addressing U.S. Wealth Inequality

America’s Challenge: Income and Wealth Inequality

  • 2020 Financial Markets Top 20 Risks (Deutsche Bank’s Chief Economist Nov 2019) #1 Risk – “Continued increase in wealth and income inequality”
  • Wealth inequality continues to grow as gains in the economy accrue to the holders of capital rather than providers of labor
  • National focus on wages addresses income inequality but does not address the “Wealth Gap” (69% Americans have less than $1,000 in savings)
  • 70% of U.S. workers believe they cannot save enough on their own to secure retirement (NIRS)

Momentum in Employee Ownership as a Solution for Wealth Inequality

  • Employee Ownership is a way for workers to participate in the value they create at $0 cost to the employee
  • Employee Owners have higher levels of income, wealth and benefits than non-employee owners. Relative to non-employee owners, employee owners:
    • Have 92% higher median household net wealth;
    • Receive 33% higher median income from wages
    • Have 2.5x greater retirement accounts
    • Have access to a greater array of benefits including flexible work schedules, retirement plans, parental leave, tuition reimbursement and childcare
  • Research shows EO companies outperform competition – Productivity improves 4-5% after ESOP is adopted
  • Mosaic’s inaugural fund has created 3,000+ employee owners
  • Target ESOP account balances of 2-4x annual income in a five-year period
  • 90% of Mosaic’s portfolio had not considered an ESOP before meeting Mosaic

Impact Affiliations

Impact News & Resources

Investing in Employee Ownership: Financing Conversions Through a Private Equity Fund Model

Transform Finance, October 2019

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ESOPs Address Wealth Inequality, New Study Finds

The ESOP Association

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Best Friends Pet Hotel Acquired by ESOP

Fifty by Fifty

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Employee Ownership Pays Dividends in Rural

The Daily Yonder

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Impact Investing and Employee Ownership

The Beyster Institute

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The Life Changing Magic of Turning Employees into Shareholders

The Atlantic

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