The Value of Ownership: ESOP Companies Achieve Strong Equity Growth

By Dr Craig West, October 29, 2025

In the evolving landscape of private business performance, one factor stands out as a consistent driver of value: employee ownership. Recent analysis of equity valuation data from over 250 Australian private companies reveals a compelling trend: firms with an Employee Share Ownership Plan (ESOP) not only start ahead in valuation but accelerate faster over time.

Visualising the Difference

ESOP mean graph

ESOP media graph

Two simple line graphs; one tracking median equity valuation, the other mean, tell the story. Each compares ESOP and non-ESOP companies over a five-year span (2020–2024). The green line represents ESOP firms; the orange line, those without.

Insightful numbers behind the plots for the ESOP cohort versus its non-ESOP peer are as follows:

Median equity valuation:

2020: ~$6.1M (ESOP) vs $5.5M (non-ESOP);
2021: 5.8M vs 3.2M;
2022: 4.8M vs 3.3M;no
2023: 7.7M vs 3.4M;
2024: 12.6M vs 5.1M.

Mean equity valuation:

2020: ~$10.7M (ESOP) vs $9.0M (non-ESOP);
2021: 10.5M vs 8.6M;
2022: 15.4M vs 7.1M;
2023: 18.5M vs 8.2M;
2024: 25.9M vs 9.3M.

Key Insights:

A consistent lead for ESOP firms: the green traces always sit above the orange ones. Whether mean or median, companies with ESOP tend to have larger equity values than those without.
Strong growth for the ESOP cohort: over five years, median values more than double and mean values nearly triple, especially between 2022–2024.
Modest movement for non-ESOP firms: medians and means of non-ESOPs remain fairly flat.
Mean versus median: the distribution is right-skewed. Means are consistently above medians in both cohorts, dramatically so for ESOP in later years, indicating a few high-performing ESOP companies set the pace.

Conclusion

The equity valuation trends from 2020 to 2024 paint a clear picture: ESOP companies are not only keeping pace but also thriving. A business that gives employees a stake appears to start ahead in value and accelerate away from peers. By 2024, the typical ESOP firm is worth more than twice what it was at the start of the decade and 2 to 3 times what a comparable non-ESOP business fetches.

Interpreted with due caution for sample composition and other factors, these findings support the intuitive benefits of employee ownership: stronger incentive alignment, engagement, and cohesion drive measurable value creation.

Dr Craig West

Founder & Chairman | Succession Plus

Dr Craig West is a strategic accountant who has over 20 years of experience advising business owners.

With a background as an accountant in practice and two master’s degrees, Craig formed a strong view that the majority of business owners (and often their advisers) were unprepared and unaware of the steps required to prepare for exit. He then designed and documented a unique 21-Step Business Succession and Exit Planning process to assist owners and their advisers in navigating this process.

Craig now acts as a strategic business and financial mentor for mid-market business owners. Craig has written four critically acclaimed books educating business owners on employee incentives, succession planning, asset protection, and exit strategies. Additionally, he has completed doctoral research on Employee Share Ownership Plans (ESOPs) for succession.

Craig is a Member of the Forbes Business Council where he leverages his extensive experience to contribute valuable insights on helping business leaders navigate the complexities of growing and exiting their businesses.

In April 2024, the Exit Planning Institute admitted Craig to the International Exit Planning Circle of Excellence.

The Value of Ownership: ESOP Companies Achieve Strong Equity Growth

Visualising the Difference

Key Insights:

Conclusion

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