Employee Ownership Blog

Labor unions at United Airline have made it clear that they do not want to exchange further concessions for more stock in the company's ESOP. Company officials, meanwhile, have made it equally clear that further contributions to the ESOP are very unlikely absent these concessions.

Three executives of Computer Associates could have to repay as much as $558 million from the exercise of stock options if a Delaware Chancery Court's ruling is upheld (Sanders v. Wang, Del. Ch. C.A. No. 16640, 11/9/99).

As part of a bill extending expiring tax incentives (S. 1792), the Senate adopted legislation introduced by Congressman James Ramstad (R-MN) and Senator Donald Breaux (D-AL) (HR 3082 and S 1732) designed to curb abuses of the S corporation ESOP law.

The number of companies setting up multinational employee ownership plans continues to expand rapidly, according to a number of speakers at the most recent Conference on Global Equity Compensation sponsored by the National Center for Employee Ownership and the American Compensation Association.

Congressman James Ramstad (R-MN) and Senator Donald Breaux (D-AL) have introduced legislation (HR 3082 and S 1732) designed to curb abuses of the S corporation ESOP law. The proposal builds on a similar bill that was in the tax bill President Clinton vetoed.

A new survey by Inc. magazine (10/99) shows that 39% of the Inc. 500, the fastest growing privately held companies in the U.S., give stock options to all full-time employees, up from 26% last year. The median employment size of the companies is 60, and median sales were $10.2 million.

New data show that the gap in income and wealth between the rich and poor has continued to increase. According to New York University economist Edward Wolff, in 1977, 43.2% of the households owned stock, but 90% of the shares were owned by the top 10% of the shareholders.

A revised version of the S corporation reform legislation that was included in the tax bill that passed Congress earlier this year (and that the President vetoed) may be resurrected in a bill to extend popular tax deductions and credits now working its way through Congress.

In conjunction with TriNet VCO, a venture capital resource company in San Leandro, CA, the NCEO recently conducted a survey on stock option plan design in companies receiving venture capital financing.

The software industry in India is starting to use broad options in a number of companies. In the September 27th issue of The Wall Street Journal, Infosys is profiled in a cover story about Indian software gurus.

The tax law passed by Congress would make a variety of changes in the rules for defined contribution plans, particularly with respect to limitations on contributions to 401(k) plans.

In an employee stock purchase plan (ESPP), employers typically allow employees a discount of up to 15% of the purchase price of the shares.