Employee Ownership Blog

A new study by Hamid Mehran of Northwestern University for Hewitt Associates has found that ESOPs in 382 publicly traded companies increased the return on assets (ROA) 2.7% over what would otherwise have been expected.

A last-ditch attempt to solve a pilots' strike by offering unions 20% of Philippine Airlines has failed and the airline has shut down operations permanently. The company had been in serious financial difficulty and had a long history of labor problems.

A 1997 study by Theresa Welbourn at Cornell University has found that companies that do an initial public offering and offer stock ownership to most or all employees are more likely to survive than companies with narrower ownership.

CNN's "Newsstand" will air a story on broad-based options on October 7. The show generally appears immediately after "Larry King Live." NCEO director Corey Rosen was interviewed for the story. Other events, of course, may change the planned airing.

Scot Forge in Spring Grove, IL, is one of the oldest ESOPs, with a plan dating back to 1978. The metal forging company was founded in 1893 and sold to an ESOP when the then-current owner decided to use the plan as a means to provide a market for his shares.

Jack Stack, CEO of Springfield ReManufacturing Corporation (SRC) and author of The Great Game of Business, told an 800-person audience at the fifth annual "Gathering of the Games" conference (a meeting on open-book management) that sharing ownership broadly with employees was the key to making op

With the recent fall in the stock market, the issue of stock option repricing has become a hot topic in many companies.

It has now been four years since the completion of the mass privatization in Russia, a transformation accomplished primarily through transferring shares to employees at little or no cost.

Employee-owned Republic Engineered Steels has agreed to be purchased by Blackstone Capital Partners and Veritas Capital Partners in a $420 million transaction. Republic, which is listed on the NYSE, is 54% owned by an ESOP.

The Financial Accounting Standards Board (FASB) has tentatively decided to require companies to account for the value of stock option repricing on their income statements.

A recent survey of 3,000 North American companies by the American Compensation Association found that 63% offered stock options to at least some employees in 1998. 55% of the companies indicated that their option plans would be extended further downward in the organization in 1999.

For anyone interested in employee ownership, the first question is always how many plans there are. Unfortunately, the best we can do is to provide a very rough estimate of the number of plans and participants.