The PR talking points from KKR and its non-profit, Ownership Works, sound good but fall apart under scrutiny. While I welcome a robust debate, your defense misses the forest for the trees and inaccurately represents what I said. It celebrates a small, positive feature of a dangerously flawed model, asking us to be grateful for a cup of water in a desert that private equity itself helped create.
Your core argument—that these programs are a step in the right direction and better than nothing—is a dangerous concession. It’s an argument that accepts the fundamentally extractive nature of private equity as a given. A slight improvement on a harmful model isn't what we should strive for.
The private equity playbook is simple and brutal: use massive debt to acquire a company, aggressively cut costs, and sell it for a huge profit a few years later. This model is so destructive that, according to the book Bad Company, PE-owned companies are ten times more likely to go bankrupt than their public counterparts. This is the rapidly descending escalator we're on. Equity-Washing is the sophisticated PR campaign designed to make us feel good about it.
Your defense fails to engage with the actual mechanics of these deals. Let's first address the specific claims made in your post, and then we will examine the crucial questions you ignore.
A Direct Rebuttal to Flawed Arguments
On Comparing KKR to Other PE Firms: You argue that KKR’s model is “absolutely” better than what other private equity firms are doing and should be judged against that low bar. We reject this framing entirely. KKR chose the language wrapping themselves in the vocabulary of a powerful economic justice movement, using terms like “shared ownership” and “partnership.” They invited the comparison to genuine employee ownership, and it is not only fair but essential to judge them by the standards they are trying to co-opt.
On the "All or Nothing" Fallacy: You suggest that our critique is that "every company has to be a 'true employee-owned' business." This is a convenient strawman, but it completely misrepresents our position. Our argument has never been an "all or nothing" demand for one specific model. We believe in a broad-based movement for economic democracy that includes fair wages, strong benefits, the right to unionize, and a diverse ecosystem of ownership models—from ESOPs and worker cooperatives to perpetual trusts. The issue with KKR is not that they failed to create a perfect ESOP. The issue is that they are performing a charade. They use the powerful language of "ownership" to provide a temporary, non-governing bonus that leaves the fundamentally extractive private equity model untouched.
On This Being a Quest for Equity: You claim "It’s not equity washing to do this, it’s just coming up with every possible way we can give more equity to more workers as quickly as we can." This statement is not just naive; it perfectly parrots KKR's central PR pitch of "alignment" while ignoring its true financial motive. KKR's model was never about a benevolent quest to "give equity." It's a calculated strategy to "align interests." This sounds collaborative, but in practice, it means aligning worker behavior with maximizing the PE firm's profit. By giving employees a small stake in the exit price, KKR incentivizes the workforce to boost the company's EBITDA. Why? Because KKR’s ultimate return is a direct multiple of that number. Every dollar of increased profit for the company translates into multiple dollars of profit for KKR. This is the very definition of Equity-Washing: using the language of "alignment" and "partnership" to mask a one-way motivational tactic designed to maximize returns for the temporary owner.
On KKR’s Scale Being a Virtue: You make a numbers-based argument, suggesting KKR's scale is a benefit that smaller, more impactful funds can't match. This is a smokescreen. KKR’s multi-billion-dollar funds suck all the oxygen out of the room preventing the more impactful funds from potentially growing. They funnel capital from institutional investors away from the ecosystem of real ownership. KKR isn't a vehicle for scale; they are an obstacle to it.
On PE Buying "Failing" Companies: You state, "Most companies purchased by PE do not—they are failing!" This is a complete fabrication. The LBO model requires stable, profitable companies with strong cash flows to service the massive debt used to acquire them. Was CHI Overhead Doors failing? Absolutely not. KKR bought it from another PE firm. They owned it for seven years—more than enough time to create a durable ownership structure. They chose a temporary bonus scheme instead.
On Cash Payouts Being Better Than Retirement Equity: You criticize genuine ownership models like ESOPs because the equity is a retirement asset, suggesting workers are better off with immediate cash. This presents a false choice between today's needs and tomorrow's security. The KKR model offers a one-time bonus as a substitute for fair wages and long-term wealth. Real ownership models provide both. The issue of immediate cash needs is real, but the solution isn't a fleeting, one-time payout from a temporary owner. The solution is better wages, stronger benefits, and fair compensation—all things that are more common in genuinely employee-owned companies where workers have a voice. These companies tend to invest more in their workforce, understanding that well-compensated, secure employees are more productive. The PE model, by contrast, is built on cost-cutting to maximize short-term profits for an exit, which often means suppressing wages and benefits. An ESOP is designed to build durable, life-altering wealth that grows over a career, sitting on top of, not in place of, fair wages. The KKR model offers a sugar high. A true ownership structure offers a lifetime of nourishment and a better daily meal. To suggest that a one-time bonus is a real solution to workers' cash needs is to ignore the systemic issues of wage stagnation that the PE model itself often exacerbates.
On the Nature of Temporary Ownership: You concede that "once it sells, the company is no longer employee-owned." This admission reveals the core deception. The problem isn’t just that the "ownership" is temporary; it was never ownership to begin with. Employees are not issued shares. They are not, in any legal or financial sense, owners. They are given a promise of a future cash bonus. The company was never employee-owned.
On KKR's "Vision" of 10% Ownership: You point to KKR’s aspirational PR, where they imagine a world with 10% worker ownership. This is a complete fantasy that has nothing to do with their actual programs. KKR’s own 2023 annual report describes the real target as “typically with opportunities to earn over six months’ worth of salary.” The gap between the 10% vision they sell and the 6-month-salary reality they deliver is a chasm. Their own model is to sell these companies leaving the employees without ownership; it's a bait-and-switch that uses the inspiring language of real ownership to provide cover for a much less generous compensation scheme.
Critical Questions Your Defense Leaves Unanswered
A defense is only as credible as the questions it is willing to answer. Your post sidesteps the most difficult questions raised by the KKR model.
1. Where Does the Money Really Come From? Your post implies KKR's model is a benevolent or superior form of capitalism. This ignores that these payouts are heavily subsidized by the American taxpayer. As our analysis details, the employee payout is structured as a massive, tax-deductible expense. For the CHI deal, this likely generated a tax shield worth over $90 million for KKR. This isn't a gift; it's a tax-efficient transaction that benefits the PE firm, paid for in part by the public.
2. What About KKR's Full Track Record? A movement's credibility rests on integrity. Early indications from our ongoing analysis suggest that not only is the CHI deal by far the best case KKR can present, but that there is a staggering lack of public information to substantiate some of their other "shared ownership" claims. Any defense of KKR must grapple with these apparent inconsistencies.
3. Is "Worker Voice" the Same as Worker Power? Finally, your defense of KKR ignores the difference between engagement and governance. "Worker voice" in the KKR model means suggestion boxes and surveys. At CHI, it meant getting air conditioning in the factory—a basic operational improvement. This is not governance; it is a focus group. Genuine ownership confers power: board representation, voting rights, and a durable stake in the company's future. The KKR model offers none of these things.
We Deserve Better Than a Polished Illusion
The path forward is not to applaud a predator for offering its prey a slightly larger-than-usual morsel. The private equity industry is a dominant and often destructive force in our economy, and we cannot allow firms like KKR to co-opt the language of a powerful economic justice movement to put a friendly face on the same damaging business model.
The good news is that we don't have to settle for this illusion. Real, durable, and democratic ownership models are being built today by funds like Apis & Heritage, Common Trust, and Torana. They prove that you can provide both excellent returns for investors and transformative, lasting wealth for workers. The debate is not about whether a small bonus is better than nothing. It is about whether we will accept a system that uses the language of empowerment to entrench an extractive model.
The choice is clear: we can settle for the illusion of shared prosperity, or we can demand the real thing. Let’s stop celebrating the polished new face of corporate greed and start building an economy that truly works for everyone.
Thanks Elle, I’m new to your Substack after watching your Substack Live interview with Sarah Wilson recently. I love your thesis that We Should Own the Economy and I really appreciated your well constructed response to Katie Boland’s argument re: equity washing. It’s a fact that diversity is the key to a healthy ecosystem and the same is true for economies. Different approaches to business ownership must be nurtured and encouraged to create more equitable distribution of wealth. I also value your willingness to highlight the points on which you and Katie agree, this is such a necessary step in moving forward with these conversations. Thank you for the work you are doing in this space, it’s so important 🙏
Oh welcome! Sarah is so great. And thanks for engaging with this conversation, it’s a hot topic in the ownership economy world. One that’s worth debating, even as we realize we’re all after the same thing. More owners of capital!
The PR talking points from KKR and its non-profit, Ownership Works, sound good but fall apart under scrutiny. While I welcome a robust debate, your defense misses the forest for the trees and inaccurately represents what I said. It celebrates a small, positive feature of a dangerously flawed model, asking us to be grateful for a cup of water in a desert that private equity itself helped create.
Your core argument—that these programs are a step in the right direction and better than nothing—is a dangerous concession. It’s an argument that accepts the fundamentally extractive nature of private equity as a given. A slight improvement on a harmful model isn't what we should strive for.
The private equity playbook is simple and brutal: use massive debt to acquire a company, aggressively cut costs, and sell it for a huge profit a few years later. This model is so destructive that, according to the book Bad Company, PE-owned companies are ten times more likely to go bankrupt than their public counterparts. This is the rapidly descending escalator we're on. Equity-Washing is the sophisticated PR campaign designed to make us feel good about it.
Your defense fails to engage with the actual mechanics of these deals. Let's first address the specific claims made in your post, and then we will examine the crucial questions you ignore.
A Direct Rebuttal to Flawed Arguments
On Comparing KKR to Other PE Firms: You argue that KKR’s model is “absolutely” better than what other private equity firms are doing and should be judged against that low bar. We reject this framing entirely. KKR chose the language wrapping themselves in the vocabulary of a powerful economic justice movement, using terms like “shared ownership” and “partnership.” They invited the comparison to genuine employee ownership, and it is not only fair but essential to judge them by the standards they are trying to co-opt.
On the "All or Nothing" Fallacy: You suggest that our critique is that "every company has to be a 'true employee-owned' business." This is a convenient strawman, but it completely misrepresents our position. Our argument has never been an "all or nothing" demand for one specific model. We believe in a broad-based movement for economic democracy that includes fair wages, strong benefits, the right to unionize, and a diverse ecosystem of ownership models—from ESOPs and worker cooperatives to perpetual trusts. The issue with KKR is not that they failed to create a perfect ESOP. The issue is that they are performing a charade. They use the powerful language of "ownership" to provide a temporary, non-governing bonus that leaves the fundamentally extractive private equity model untouched.
On This Being a Quest for Equity: You claim "It’s not equity washing to do this, it’s just coming up with every possible way we can give more equity to more workers as quickly as we can." This statement is not just naive; it perfectly parrots KKR's central PR pitch of "alignment" while ignoring its true financial motive. KKR's model was never about a benevolent quest to "give equity." It's a calculated strategy to "align interests." This sounds collaborative, but in practice, it means aligning worker behavior with maximizing the PE firm's profit. By giving employees a small stake in the exit price, KKR incentivizes the workforce to boost the company's EBITDA. Why? Because KKR’s ultimate return is a direct multiple of that number. Every dollar of increased profit for the company translates into multiple dollars of profit for KKR. This is the very definition of Equity-Washing: using the language of "alignment" and "partnership" to mask a one-way motivational tactic designed to maximize returns for the temporary owner.
On KKR’s Scale Being a Virtue: You make a numbers-based argument, suggesting KKR's scale is a benefit that smaller, more impactful funds can't match. This is a smokescreen. KKR’s multi-billion-dollar funds suck all the oxygen out of the room preventing the more impactful funds from potentially growing. They funnel capital from institutional investors away from the ecosystem of real ownership. KKR isn't a vehicle for scale; they are an obstacle to it.
On PE Buying "Failing" Companies: You state, "Most companies purchased by PE do not—they are failing!" This is a complete fabrication. The LBO model requires stable, profitable companies with strong cash flows to service the massive debt used to acquire them. Was CHI Overhead Doors failing? Absolutely not. KKR bought it from another PE firm. They owned it for seven years—more than enough time to create a durable ownership structure. They chose a temporary bonus scheme instead.
On Cash Payouts Being Better Than Retirement Equity: You criticize genuine ownership models like ESOPs because the equity is a retirement asset, suggesting workers are better off with immediate cash. This presents a false choice between today's needs and tomorrow's security. The KKR model offers a one-time bonus as a substitute for fair wages and long-term wealth. Real ownership models provide both. The issue of immediate cash needs is real, but the solution isn't a fleeting, one-time payout from a temporary owner. The solution is better wages, stronger benefits, and fair compensation—all things that are more common in genuinely employee-owned companies where workers have a voice. These companies tend to invest more in their workforce, understanding that well-compensated, secure employees are more productive. The PE model, by contrast, is built on cost-cutting to maximize short-term profits for an exit, which often means suppressing wages and benefits. An ESOP is designed to build durable, life-altering wealth that grows over a career, sitting on top of, not in place of, fair wages. The KKR model offers a sugar high. A true ownership structure offers a lifetime of nourishment and a better daily meal. To suggest that a one-time bonus is a real solution to workers' cash needs is to ignore the systemic issues of wage stagnation that the PE model itself often exacerbates.
On the Nature of Temporary Ownership: You concede that "once it sells, the company is no longer employee-owned." This admission reveals the core deception. The problem isn’t just that the "ownership" is temporary; it was never ownership to begin with. Employees are not issued shares. They are not, in any legal or financial sense, owners. They are given a promise of a future cash bonus. The company was never employee-owned.
On KKR's "Vision" of 10% Ownership: You point to KKR’s aspirational PR, where they imagine a world with 10% worker ownership. This is a complete fantasy that has nothing to do with their actual programs. KKR’s own 2023 annual report describes the real target as “typically with opportunities to earn over six months’ worth of salary.” The gap between the 10% vision they sell and the 6-month-salary reality they deliver is a chasm. Their own model is to sell these companies leaving the employees without ownership; it's a bait-and-switch that uses the inspiring language of real ownership to provide cover for a much less generous compensation scheme.
Critical Questions Your Defense Leaves Unanswered
A defense is only as credible as the questions it is willing to answer. Your post sidesteps the most difficult questions raised by the KKR model.
1. Where Does the Money Really Come From? Your post implies KKR's model is a benevolent or superior form of capitalism. This ignores that these payouts are heavily subsidized by the American taxpayer. As our analysis details, the employee payout is structured as a massive, tax-deductible expense. For the CHI deal, this likely generated a tax shield worth over $90 million for KKR. This isn't a gift; it's a tax-efficient transaction that benefits the PE firm, paid for in part by the public.
2. What About KKR's Full Track Record? A movement's credibility rests on integrity. Early indications from our ongoing analysis suggest that not only is the CHI deal by far the best case KKR can present, but that there is a staggering lack of public information to substantiate some of their other "shared ownership" claims. Any defense of KKR must grapple with these apparent inconsistencies.
3. Is "Worker Voice" the Same as Worker Power? Finally, your defense of KKR ignores the difference between engagement and governance. "Worker voice" in the KKR model means suggestion boxes and surveys. At CHI, it meant getting air conditioning in the factory—a basic operational improvement. This is not governance; it is a focus group. Genuine ownership confers power: board representation, voting rights, and a durable stake in the company's future. The KKR model offers none of these things.
We Deserve Better Than a Polished Illusion
The path forward is not to applaud a predator for offering its prey a slightly larger-than-usual morsel. The private equity industry is a dominant and often destructive force in our economy, and we cannot allow firms like KKR to co-opt the language of a powerful economic justice movement to put a friendly face on the same damaging business model.
The good news is that we don't have to settle for this illusion. Real, durable, and democratic ownership models are being built today by funds like Apis & Heritage, Common Trust, and Torana. They prove that you can provide both excellent returns for investors and transformative, lasting wealth for workers. The debate is not about whether a small bonus is better than nothing. It is about whether we will accept a system that uses the language of empowerment to entrench an extractive model.
The choice is clear: we can settle for the illusion of shared prosperity, or we can demand the real thing. Let’s stop celebrating the polished new face of corporate greed and start building an economy that truly works for everyone.
Thanks Elle, I’m new to your Substack after watching your Substack Live interview with Sarah Wilson recently. I love your thesis that We Should Own the Economy and I really appreciated your well constructed response to Katie Boland’s argument re: equity washing. It’s a fact that diversity is the key to a healthy ecosystem and the same is true for economies. Different approaches to business ownership must be nurtured and encouraged to create more equitable distribution of wealth. I also value your willingness to highlight the points on which you and Katie agree, this is such a necessary step in moving forward with these conversations. Thank you for the work you are doing in this space, it’s so important 🙏
Oh welcome! Sarah is so great. And thanks for engaging with this conversation, it’s a hot topic in the ownership economy world. One that’s worth debating, even as we realize we’re all after the same thing. More owners of capital!
Thanks for taking the time to comment!🤓
Don't let the perfect be the enemy of the good. Great article Elle.
Exactly. Thanks David!
Great article. Any company which enables employees to better share in the wealth created by their companies should be encouraged!
Right, why is there only one right way? (That doesn't scale).