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A study seeks to explain why companies do or do not introduce employee profit sharing, through a telephone survey of CEOs at 626 Canadian companies. In addition to examining some of the usual contextual variables, the study goes beyond previous work by directly questioning CEOs about their motives for adopting or not adopting profit sharing, and by including managerial philosophy as a possible factor in their decision-making process. Results indicated that managerial philosophy and company size were the 2 key predictors of incidence or profit sharing. However, the firms most likely to adopt profit sharing in the future were those experiencing a high growth in sales coupled with a low growth in employees. Surprisingly, unionization was not related to either presence of, or intention to implement, profit sharing.