Sherwin-Williams to Pay $80 Million to ESOP Participants in Settlement
Executive Director
The U.S. Department of Labor (DOL) and Sherwin-Williams reached an agreement under which the company will pay $80 million to current and past participants of its ESOP. The settlement followed an investigation by the DOL's Employee Benefits Security Administration (EBSA) into possible ERISA violations connected with two transactions, one in 2003 and one in 2006, in which the plan purchased shares issued by Sherwin-Williams solely for the purpose of those transactions. The assistant secretary of labor for EBSA, Phyllis Borzy, said that the plan's fiduciaries must act "to manage plan investments to provide a secure retirement, not to help the plan sponsor secure tax breaks that are wholly disproportionate to the benefits actually provided to retirees." EBSA's investigation concluded that the price paid by the plan was excessive, relative to the benefit received by plan participants. As a result of the settlement, the plan's fiduciary, GreatBanc Trust Co., will audit its engagements that involve plans with company stock and provide a report to the DOL.