Employee Ownership Blog

The Nasdaq stock exchange has passed a rule that would require more stock option plans to seek shareholder approval. The New York Stock Exchange is expected to follow suit with similar rules.

A survey of 202 large US companies by HR consulting firm Hewitt Associates has found that 34% plan to decrease the proportion of employee compensation represented by options and other company stock, while 52% plan to keep the level the same, and 14% plan to increase it.

A new survey by Grant Thornton International finds that 18% of community banks have ESOPs. Seven percent offer stock options, but very few of these offer them to below the management level. ESOPs are more prevalent in community banks than in any other industry.

A bipartisan group of moderate Democratic and Republican Senators has introduced S.

Pamela Olson, acting assistant Treasury secretary for tax policy, said that the Administration would be willing to consider delaying proposed IRS regulations that would impose payroll tax withholding on incentive stock options and employee stock purchase plans if they are too burdensome.

Shareholders of Mentor Graphics have voted to require the company to get approval of stock option plans. Mentor granted seven percent of its outstanding shares in options in 2000.

In a Technical Assistance Memorandum dated November 5, 2001 and recently released, the IRS ruled that distributions on ESOP stock in an S corporation ESOP must be based on account balances, not compensation.

A new survey from Hewitt Associates, Hot Topics in 401(k) Plans, indicates that that 38% of 300 large public companies surveyed use company stock as a match to 401(k) deferrals, and 86% restrict diversification of those contributions.

Jack Stack and Bo Burlingham, A Stake in the Outcome (Doubleday, 2002, $24.95, 266 pp).

The International Accounting Standards Board (IASB) has made further progress in developing proposals on accounting for stock options. The body wants to require that companies show a current cost for options grants on their income statements.

On a 255 to 163 vote, the House passed H.R. 3762, the Pension Security Act. The bill follows the general outlines of President's Bush's proposal for retirement plan reform, but adds some significant new initiatives.

The retirement reform bill passed by the House includes a provision that prohibits the IRS from imposing planned withholding requirements for ISOs and ESPPs.