Employee Ownership Blog

Employer stock in 401(k) plans held steady at 19% of total plan assets, according to a comprehensive new report of the Employee Benefit Research Institute (EBRI) and the Investment Company Institute (ICI). The EBRI/ICI study is the most comprehensive analysis of 401(k) plan investments.

Responding to the Enron case, House members Peter Deutsch (D-FL) and Gene Green (D-TX) are introducing legislation to limit employer stock in 401(k) plans to 10% of total assets. Senator Jeff Bingaman (D-NM) is also drafting legislation to limit employer stock.

A new study by Andersen (formerly Arthur Andersen) shows that 95% of 185 large US, UK, and Canadian multinational companies responding to a survey have some kind of employee share plan.

A new study of 100 large companies by Watson Wyatt shows that 60% plan no changes in their options programs. Only 4% are repricing, while 19% are canceling with a subsequent reissue (generally six months later).

In DeNadai v Preferred Capital Markets Inc. (D. Mass, No. 01-40073-WGY, 11/13/01), a U.S. District Curt ruled that unvested options are contingent property of an estate that are subject to bankruptcy claims.

In Abraham v. Norcal Waste Systems, Inc., 9th Cir., No. 99-17040, 9/7/01), an appeals court overruled a lower court's decision that ERISA preempted a claim by shareholders (some of whom were also ESOP participants) against Norcal for defaulting on a loan.

In Benefits Committee of Saint-Goban Corp. et. al vs. Key Trust Company of Ohio, N.A. (U.S. District Court, Northern District of Ohio, Eastern Div., No.

An arbitrator ruled that a union agreement with Dyncorp Aerospace Technology did not require the company to pay out employees who were not both vested and had received a payout during the specified contractual term at a collectively bargained floor price.

In Beal Bros. Management Corp. v. Commissioner (T.C., No. 10871-99R, T.C. Memo. 2001-234, 9/6/01), the IRS ruled that Beal Brothers Management Corporation's ESOP did not meet minimum participation standards.

As expected, the IRS has proposed regulations that would require employers to withhold taxes on stock option exercises or purchases under incentive stock option (ISO) plans or employee stock purchase plans (ESPPs).

Employees have completed a $810 million transaction to purchase Appleton Papers from the French holding company Worms. The Appleton, WI company is the world's largest supplier of thermal and self-copying paper.

The International Accounting Standards Board has begun what promise to be long deliberations on developing standards for stock options accounting.