Loren Rodgers
Announcing the NCEOX Collaboration
If you were not in Kansas City last week for the 2023 Employee Ownership Conference, I want to share an announcement I made:
Employee Ownership Blog
Loren Rodgers
Just-Launched “Shares Laboratory” to Study Equity Compensation
The Institute for the Study of Employee Ownership and Profit Sharing at Rutgers University announced on April 18 that it is launching the Shares Laboratory. The lab will use "big data" and a model of the national labor force to conduct research, monitoring, and policy-relevant work on all forms of equity compensation.
Corey Rosen
Washington Governor Signs Most Comprehensive Bill Yet on Employee Ownership
By a unanimous vote, both chambers of the Washington State Legislature have passed S.B. 5096, “An act relating to expanding employee ownership.” On May 9, Governor Jay Inslee signed the bill. The law creates the most ambitious state employee ownership program yet. It includes the following provisions:
Corey Rosen
DOL Commits to Regulatory Process for ESOP Valuation Guidelines
Update: On August 25, 2023, the DOL announced that the proposed rules will be released by the end of the year.
Lindsay Isaac
Communicating ESOP Literacy
On April 12, people from 23 employee-owned companies gathered online to talk about business literacy, stock value, and ESOPs for employees. Beginning with some thought-provoking ideas from volunteer leaders of the Finance Working Group and from NCEO staff, the group split up into breakout rooms to talk, peer-to-peer, about challenges and solutions to improve business literacy at their respective companies.
Corey Rosen
Canadian Budget Creates Structure for Employee Ownership Trusts
The Canadian government’s proposed 2023 budget creates a framework for employee ownership through employee ownership trusts. The budget states:
Corey Rosen
NY Bill Would Create State EO Center, Eliminate Cap Gains Taxes on Sales to EO Companies
New York Assembly bills A1920 and S962 would create a state employee ownership center to be housed at a university to provide outreach, education, and training on employee ownership, including ESOPs, worker cooperatives, and businesses that otherwise have a majority of their voting stock owned by employees. No specific funding is stipulated in the bill. It also provides that companies considering a transition to employee ownership can apply for loan assistance from the New York State business development loans. The loans could be funded through a public authority trust fund that could allocate up to $100 million in initial funding for this purpose. The bill does not contain a specific appropriation for this process, however. New York already authorizes public authority trusts funds for other purposes.
Corey Rosen
British Retailer the John Lewis Partnership Explores Moving Away from 100% Employee Ownership
The John Lewis Partnership, an iconic British retailer, is considering outside investors for the first time, a move that would dilute its 100% ownership through an employee ownership trust. John Lewis operates the John Lewis & Partners department store chain (34 stores) and Waitrose supermarkets (332 stores) and has 80,000 employees. The company had a loss of £78 million last year, and faced even tougher years during the peak of the COVID-19 pandemic. Inflation, a weaker British economy, and supply chain issues have added to ongoing problems.
Corey Rosen
New NCEO Data on the Costs of ESOP Litigation
A new NCEO study found that, over the last 10 years, 68 private company ESOP court cases had results in settlements or judgments that cost the defendants a total of $385.5 million. The average payout per employee in these cases was $14,400 per participant. If these costs were spread out over all private company ESOPs, this would average about $6,200 per year per company. Of course, that is not how these amounts are paid, but it provides context to compare what companies and/or ESOP trustees pay per company in fiduciary insurance.