It is true that there is no single definition of "employee owned". However, in most contexts having a small monority of company stock owned by employees doesn't really count, if only a small percent of the company is actually owned by the employees.
I understood the context of the question to be cases where employees own the majority of the company. Maybe that is not what the questioner was meaning though.
I'm speaking of 100% employee-owned companies here. That's my experience.
In general, once a company established an ESOP[1], they eventually become 100% employee-owned. Usually when an owner establishes and ESOP that's the end goal.
It just takes many years to get to 100% because the company has to purchase shares from the owner and distribute them to the employees. It's not something that can happen overnight because the company has to fund those share purchases. Yes, the owner is paid, they don't actually "give away" the company.
[1] I should mention, in case it's not clear, that ESOP is not a general concept - it's a specific type of retirement plan in US law that's got a bunch of requirements associated with it.
>An ESOP is also a flexible, tax-advantaged business transition and corporate finance tool that enables stakeholders in closely held companies to access their equity without giving up management control of the company, which enables an owner to carefully plan leadership succession and a smooth transition
I understood the context of the question to be cases where employees own the majority of the company. Maybe that is not what the questioner was meaning though.