From Owner to Employee: How Retirement Is Shifting Business Ownership

Mon Jun 15 2026 07:49:11 GMT+0000 (Coordinated Universal Time)

When US small‑business owners hit retirement age, many hand their firms to staff instead of selling to outsiders, sparking a new wave of employee ownership.

Softstar Shoes in Oregon became a case study in January 2026 when founder Tricia Salcido sold the company to her 30‑strong team. The move, part of a growing trend that could see up to 600 U.S. firms sold to employees annually, offers workers equity, higher wages and job security. Researchers see gains in productivity and reduced layoffs for employee‑owned firms, yet the conversion process is complex and costly for departing owners. Business scholars and policy makers are urging streamlined programmes and clearer awareness to support future transitions.

From Owner to Employee: How Retirement Is Shifting Business Ownership

In the coastal town of Coos Bay, Oregon, Softstar Shoes witnessed a quiet revolution this January. Founder and chief executive Tricia Salcido, 56, decided to sell her company to its own workforce of 30 employees. The deal, carried out through an Employee Ownership Trust (EOT), turns the business into a trust owned by staff, cutting out the need for workers to purchase the firm outright.

Salcido’s choice is part of a broader movement. A 2025 study found that up to 600 U.S. companies have been sold to their own workers each year, with investment funds for such deals rising 78% to $865 million in 2024 from $500 million a year earlier. For many retiring entrepreneurs, selling to employees preserves local jobs and keeps the company in the community.

Softstar Shoes staff at their Oregon shop — Softstar Shoes’ team now owns the company they built.

The move gives staff a stake in the business’s future profits. According to research, employee‑owned firms are 8–12% more productive, less likely to outsource or lay off staff, and pay higher wages than their non‑shared counterparts. Salcido praised the new model for allowing workers to contribute ideas—a luxury she never saw before.
She explains that she stayed on as chief financial officer to help the transition and will receive her sale price in installments tied to future earnings.

Employee ownership is not limited to Ditto; the Philadelphia‑based Stockwell Elastomerics followed a similar path with an ESOP, and the SilkoTek Corporation in Pennsylvania is in the process of transferring ownership to staff. ESOPs, the most common model, place a corporate trust that grants workers shares that vest upon departure, while worker cooperatives see employees buy a direct slice of the business.

Harvard Business School professor Ethan Rouen points out that aging founders, often termed the "silver tsunami," are looking to preserve their legacy. Twenty‑seven million companies are expected to retire between 2026 and 2035, he says, sparking a once‑in‑a‑generation wave of ownership transitions. The U.S. Department of Labor’s Employee Ownership Initiative and bipartisan congressional support aim to simplify the process and raise awareness.

Yet the path is riddled with challenges. Compared to a straight sale, setting up an EOT or ESOP is more involved, risky, and often delayed over a decade. Retiring owners must plan early, remain patient, and have faith that their employees will carry the torch forward.

The coming years will likely see an uptick in employee‑owned transitions, according to Professors Rouen and colleagues, as newer workers gravitate toward the prospect of shared ownership and equitable wealth creation. For now, the trend continues to reshape how U.S. small and medium enterprises are passed on, turning the sunset of one generation into the dawn for the next.