Employee Ownership Blog

Essentially the same version of the Comprehensive Retirement Security Act (H.R. 10) that passed the House overwhelmingly last year was reintroduced in March by its principal sponsors, Rob Portman (R-OH) and Ben Cardin (D-MD).

A recently released survey of 200 mostly new economy companies by the consulting firm iQuantic shows that the percentage of high-technology employees getting options was 30% to 50% higher in 1999 than in was four years earlier.

According to the Employee Share Ownership Centre in London, the Blair government has introduced legislation that would expand the existing Enterprise Management Incentive plan.

A U.S. district court in Missouri ruled that an employment-related complaints that revolved around alleged promises made by Amsted Industries in conjunction with its ESOP were not preempted by ERISA and could be pursued under state law (Thrailkill v. Amsted Industries, Inc., May 31, 2000).

To read the press reports, stock options have become about as popular as Bill Clinton at a Wall Street Journal editorial conference. Fortunately, the press is wrong.

In PLR 200108043, the IRS ruled on a case in which a subsidiary of a holding company with various operating subsidies went public. The holding company had been closely held, and none of the members of the holding company had been publicly traded.

The U.S. Supreme Court declined to review a lower court's ruling that an arbitration award in a stock option case was warranted (Coleman Co. v. Brown, U.S. No. 00-1051, cert denied, 2/26/01).

The U.S. Court of Appeals for the First Circuit affirmed a lower court finding that an executive who missed the deadline for exercising options was not entitled to compensation (Ostler v. Codman Research Group, Inc., 1st Cir., No. 99-2367, 3/2/01).

A new study by the Employee Benefit Research Institute and the Investment Company Institute shows that 17.7% of all 401(k) plan assets are invested in company stock. Not all plans offer company stock, however. In general, only publicly traded companies do so.

A new study of 217 new economy companies by Christopher Ittner, Richard Lambert, and David Larcker at the Wharton School of Business at the University of Pennsylvania finds that returns to shareholders increased when the ratio of options to salary increased for mid-level employees.

A new study of British companies by Martin Conyon at Wharton and Richard Freeman at Harvard shows that companies with stock option plans and profit sharing improved their performance over a four-year study period.

In Scully v. US WATS Inc. (3rd. Cir., No. 99-1590, 2/1/01), an executive, Mark Scully, argued that the options he was given at the time he was fired should have been valued effective as of the date the options were to expire, not when he was terminated.