Employee Ownership Blog

Employees at bankrupt US Airways have agreed to take concessions in return for four seats on the 15-person board of directors and for restricted preferred stock in the company.

Employees of the IIT Research Institute have bought out the defense technology portion of the non-profit organization using an ESOP (employee stock ownership plan). The 1,700 employees now own 100% of the McLean, VA based company.

As expected, the Financial Accounting Standards Board has issued guidelines on how companies that voluntarily expense options can make the transition from accounting for options under APB 25, which does not require options to show as a cost on the income statement, to FAS 123, which does.

In Revenue Ruling 2003-6, the IRS has struck decisively at companies that want to use S corporation ESOPs to benefit a small number of people while providing insubstantial benefits to employees.

The number of households with one or more wage earners holding stock options dropped from 33% in 2000 to 25% in 2002. In neighboring San Francisco County, options use dropped even more, where 20% of the households had options in 2000, but only 12% did in 2002.

United's bankruptcy won't have quite the impact on the company's ESOP and 401(k) plans that might be expected. That's because trustees of both plans have been selling off shares held by employees in both plans.

In a December 6 letter to the United Brotherhood of Carpenters and Joiners, Martin Dunn, the SEC's deputy director of corporation finance, said that following an SEC review of the matter, "in the future, we will not treat shareholder proposals requesting the expensing of stock options as relating

In a new study of the market's reaction to announcements that companies were going to expense options, Towers Perrin has found that in the 120 days surrounding the announcement by 103 companies in the summer of 2002 that they were going to expense options, stock prices at these companies did not

Thirty-three technology companies have proposed an alternative to stock options expensing.

In a decision that seems to provide considerable leeway for ESOP fiduciaries to hold onto employer stock even in the face of information that seems to argue for selling shares, a U.S.

The International Accounting Standards Board (IASB) has an exposure draft on how companies should account for stock options and other forms of equity compensation. "ED 2 Share-based Payment " is now available for public comment. The electronic text will be available free November 18.

The Department of Labor (DOL) has issued the first of what will be periodic Field Assistance Bulletin (FAB) on the operation of qualified plans. The advisories are meant to give DOL field officials guidance on how to respond to various plan operational issues.