Employee Ownership Blog

Over the period 1991 through 1996, the ACS employee ownership index has measured the shareholder returns in public companies with 10% or more broad employee ownership. The index has substantially outperformed market averages.

A new study by the Ohio Employee Ownership Center indicates that employee control of companies at the board level does not account for the cases where these companies have failed.

The 370 employees of a Maine textile plant that makes blankets for Sunbeam electric blankets have bought their company from Sunbeam. Sunbeam has undergone radical downsizing in the last year. The Biddeford plan is sole supplier and will continue to be.

The plan by Travelers Group to contribute stock options to its 401(k) plan is getting another look from the IRS. The IRS had initially given the first-of-its kind plan a favorable private letter ruling, but it now is reexamining the issue.

McKay Nurseries, a wholesale and retail nursery in Waterloo, Wisconsin, has been named a winner of the Business Enterprise Trust award for 1997. The award is given to four individuals and companies each year by a foundation created by Norman Lear and based in Stanford.

A coalition led by the Italian worker cooperative movement will present a proposal to create employee ownership legislation in Italy. The proposal, to be presented in May, will create a trust-based employee ownership plan funded out of existing pension contributions by Italian employers.

In the Chinese version of the State of the Union address, China's premier Li Peng has given his approval for reforms of state-run enterprises, including allowing employees to own stock in their companies.

Senate Democratic leader Tom Daschle (D-SD) has introduced legislation to allow owners of stock in closely held companies to take a tax deduction for contributions of their shares to an ESOP.

A new NCEO study concludes that 5 million employees work for companies with broad stock option plans. The estimate is probably conservative, but still reflects the enormous growth is this approach to employee ownership.

The Financial Accounting Standards Board (FASB) announced this month (March 1997) that it would change accounting standards for the way companies calculate per-share net earnings. The new rules are effective December 15, 1997.

The Travelers Group, a financial services company that includes Travelers/Aetna Insurance, Smith Barney, Commercial Credit, and other businesses, will make annual contributions of stock options equal to 10% of pay to all employees participating in its 401(k) plan.

China's new leader, Jiang Zhemin, has said that employee ownership is an approach that should be considered for smaller enterprises. In China, that can include companies with thousands of employees. There are already a number of local governments selling off enterprises to employees.