Types of Employee Ownership Programs
Three primary sets of factors influence the selection of employee ownership vehicles used to establish a plan: ownership vision, strategic business objectives, and specific characteristics of the company and its employees. Although unique to each company, these factors help guide the plan development process. When analyzed together, several employee ownership alternatives should emerge as best suited to a company's particular needs. Evaluating each from the perspective of its operational dynamics may provide useful insight into which employee ownership method to use.
Employee ownership programs can be broken down into three general types:
 Individual-based plans
Individual-based plans provide managers with discretion to decide who should receive stock awards and in what amounts. These plans are flexible and relatively inexpensive to implement. They can be used as incentives tailored to certain individuals or teams and may be linked with specific performance targets.
 Company-wide plans
Company-wide plans are better suited for sharing equity with a wide cross-section of the workforce. In order to encourage companies to share stock with most employees, these plans generally provide significant tax advantages to the company. As a condition for receiving these tax benefits, strict rules regarding how these plans may be structured must be followed.
 International Equity Compensation
The success of employee ownership in the United States has fueled growing interest in the use of broad-based employee ownership plans around the world. These plans can take many different forms.
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