United's ESOP Not Likely to Be Renewed

Labor unions at United Airline have made it clear that they do not want to exchange further concessions for more stock in the company's ESOP. Company officials, meanwhile, have made it equally clear that further contributions to the ESOP are very unlikely absent these concessions. The result is that no further contributions will be made to the ESOP when its current loan is paid off next year. The plan would remain in place, however until its assets are paid out. Under terms of the agreement setting up the plan, unions would retain board membership and certain control rights until the plan drops from its current 55% ownership to under 20%, an eventuality projected to occur 16 years from now.

While the ESOP will likely not receive additional funding, discussion is continuing about whether some kind of alternative ownership possibilities could be created, such as allowing voluntary purchases of stock.