More Reaganesque than Marxist
Chris Busby’s article on Shawn Moody and the employee stock ownership plan (ESOP) at Moody’s Collision Centers makes some very peculiar arguments [“Shawn Moody’s Greasy Secrets,” Oct. 2018]. First, he says the idea of sharing ownership with employees and letting them contribute ideas on how to run the company is downright Marxist. Actually, Marx never wanted employees to own individual businesses — ownership would be held socially in some unspecified form.
Employee ownership, by contrast, is a very American idea. There are about 7,000 ESOPs like the one at Moody’s and they have 14 million participants. The idea of the employee stock ownership plan is ingrained in federal law and supported by generous tax breaks supported equally by Republicans and Democrats. Just this year, Congress passed a new bill to support employee ownership (the aptly named Main Street Employee Ownership Act) that passed without opposition and was sponsored by the most liberal and conservative members of Congress.
ESOP companies, like Moody’s, perform far better for both the company and the employees. Many employees at Moody’s have six-figure ESOP accounts and can anticipate very comfortable retirements with their combined ESOP and 401(k) assets.
Busby excoriates Moody’s for sharing just 10 percent of the profits with employees. By the standards of U.S. companies, that is generous indeed. And the one-third that employees own of the company came at no cost to them.
Far from being Marxist, as Ronald Reagan once said, there is no better response to communism than employee ownership. Whether Shawn Moody’s overall policy approaches are good or bad for Maine is an issue for Maine voters, but whether the ESOP at his company is a good or bad thing for employees seems beyond question (and indeed, the company has won numerous best-workplace awards).
Founder, National Center for Employee Ownership