For many employee ownership companies, the answer is yes.
Dividends can focus people's attention on ownership and, in ESOPs, can provide unique tax benefits.
Dividends used to repay ESOP loans are tax-deductible and normally do not count towards limits on how much stock can be allocated to employee accounts. Dividends passed through on ESOP shares can also be paid directly to employees, with the company deducting their value. Companies considering paying dividends need to consider several issues in making a decision. If a company has just one class, paying dividends on the ESOP shares can require paying dividends on other shares. Owners of these shares may not want dividends paid to them because both they and the company are taxed on the dividend amount.