Most ESOPs never will give employees enough of a share to feel like stakeholders. Consider: your salary is $30,000. You own 5000 shares of stock at $20, which would be a lot for someone at this paygrade to have accumulated. Would you prefer a 3% raise or a $0.25/share dividend/quarter? Obviously, you’d prefer the raise. But the non-employee stockholders want the dividend. There’s only so much money to go around.

On the other hand, the executives are probably being given tons of stock, in addition to lavish pay. Your piddly 5000 shares will never have any voice compared to their 500,000 or 1,000,000 shares. They are unlikely to give you and your fellow workers that kind of voting power either.

The situation is even more cynical when it’s employee stock options plans. There, the vesting period is usually unreasonable, like 5 years. Companies grant options for like 1000 shares to line employees, and then think that this will motivate them to “work hard” and build the company for five years. Most employees write these things off like they’re as fake as they are. As employees were leaving one sinking ship I observed, the managers were like, “What about your options!” The employees were incredulous that the managers actually believed the options would ever be in the money.

The only way to truly motivate employees with ownership is to give them enough voting power that a reasonable-size bloc could seriously affect the direction of the company, such as in the selection of executives and their pay, and in the financial decisions. I don’t think many companies are willing to go this far!

In my opinion, it’s much easier to just hire people for jobs they want to do, and not sap their intrinsic motivation.