Employee Ownership Blog

An analysis by the Congressional Budget Office (CBO) of the impact of stock option expensing concludes that neither stock prices nor the economy will be significantly affected.

The "Broad-Based Stock Option Plan Transparency Act" (H.R. 3574), sponsored by Rep.

In Wright, Buchanan, and Hagen. v. Oregon Metallurgical Corporation, No. 02-3583, Civ.-01-00325-BR (9th Circ. Ct.

Opponents of expensing stock options have made some headway in the House on legislation to limit expensing to options for the top five executives of public companies. House Minority Leader Nancy Pelosi (D-CA) has joined 39 other members as a sponsor for H.R.

On February 19, the International Accounting Standards Board (IASB) issued an exposure draft of its new International Financial Reporting Standard 2, Share-based Payment.

Both the South African and Korean governments have indicated they plan to introduce legislation to encourage broad-based employee ownership.

Bi-Mart, a 3,000-employee chain of 64 membership discount stores in Washington, Oregon, and Montana will be sold to an ESOP. The company could have been sold on the market, but its owners, who included the venture capital group Endeavor Capital, preferred that employees take over.

Data from the General Social Survey from the National Opinion Research Center show that 32.1% of employees with stock or stock options in their company say they are more satisfied with their financial condition, compared to 23.1% of those without company stock.

In Revenue Ruling 2004-4, the IRS ruled that ESOP S corporation structures in which individuals are given options to buy stock in subsidiaries of the parent corporation will be subject to rules limiting synthetic equity holdings of plan participants.

In "Broad-Based Stock Options Before and After the Market Meltdown," James Sesil of Rutgers and Maya Krumova of the N.Y. Institute of Technology use NCEO lists of companies with broad-based options in 1998 and 2000 to evaluate the impact of these plans on productivity.

A new NCEO issue brief titled "The Future of Broad-Based Stock Options" looks at what is now the substantial body of research on this topic. The report begins with an assessment of what impact expensing stock options and other equity will have on stock prices.

In recent years, it has become more common for companies (particularly publicly traded companies) to integrate their 401(k) plans and ESOPs, using the ESOP to make their corporate match and, in many cases, allowing employees to invest in company stock as an option for their deferrals.