Employees Sue United

A $1 billion class action suit has been filed by several United Airlines employees who contend the ESOP overpaid for the shares (Summers v. State Street Bank). The suit alleges that true value of the shares was $88, not $198, the price assumed in valuing the concessions made by employees.

Republic Engineered Steels to Go Public

Republic Engineered Steels, one of the nation's largest majority employee owned firms, will soon do a public offering. The 5,000-employee company was saved from closing by an employee buyout and has since returned to profitability on an operating basis.

$60,000 Stock Certificate Framed, Not Sold

The difficulty of explaining stock ownership to employees was driven home recently by Steven Lear, who oversees the ESOP at U.S. Sugar, a majority employee owned company and one of the largest sugar processors in the world. An employee left with a $60,000 account balance.

Malaysia to Hold Conference on Employee Ownership

Malaysia, one of the Southeast Asia's fastest-growing economies, will hold a conference on employee ownership in late August. The conference will explore the growing use of employee ownership in the country, occurring primarily through share purchase programs.

Chinese Delegation to Visit U.S.

A group of high-ranking Chinese officials from the state privatization council will visit the U.S. in July to learn more about employee ownership.

IRS Issues ESOP Examination Guidelines

The Internal Revenue Service has issued examination guidelines for its agents to use when assessing ESOPs. There are no surprises in the guidelines, which, in any event, do not have regulatory force. They do, however, provide a good overview of basic ESOP procedures.

Employees Often Exercise Stock Options Early

According to economic theory, an employee given a stock option would be "irrational" to sell the option too soon before it expires. Models for pricing the value of options, in fact, typically assume they are held until the expiration date.

Getting Rich by Giving Away the Store

Most employee ownership plans involve someone selling stock to an employee plan. Paul Merriman just gave it away. Merriman bought a tiny operation called HISCO, a Houston industrial supply company, in 1974 for $100,000.

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John Case of Inc. magazine has been one of the outstanding chroniclers of the revolution taking place at work.