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The Employee Ownership Update

Corey Rosen

June 12, 2009

(Corey Rosen)

Cleveland Launches Major Worker Cooperative Initiative

Cleveland has launched a major initiative to create worker-owned cooperatives in the green business sector. Funded in part by a low-interest loan of $1.5 million from the city's Department of Economic Development, the co-ops will include laundry services, solar energy, and urban agriculture businesses to start. Their clients will initially come from "anchor institutions" such as local hospitals and universities that cannot leave the area. The project was the initiative of the Cleveland Foundation. The Ohio Employee Ownership Center and Shore Bank are also involved in the effort. For a detailed article on this intriguing innovation go to this link.

Rutgers Announces Shared Capitalism Fellowship Awards

Rutgers University's School of Management and Labor Relations (SMLR) announced that 11 top experts and up-and-coming scholars of employee ownership, profit sharing, and broad-based stock options have been awarded fellowships to study the role that shared capitalism plays in corporations and the economy in general.

SMLR's new annual fellowship program was established with a major gift from J. Robert Beyster and Mary Ann Beyster of La Jolla, California, with a grant from the Foundation for Enterprise Development. Details on the program and a list of the winners can be found at this link.

Index of British Public Companies with Broad-Based Ownership Outperforms the Market

Companies in the Employee Ownership Index (EOI) published by Field Fisher Waterhouse LLP have outperformed FTSE All-Share index companies each year by, on average, 10%. Over successive three-year periods they have outperformed by 41% and over successive five-year periods by 78%.

The EOI, compiled by the firm's equity incentives team, monitors the share price performance of listed companies, comparing the performance of FTSE All-Share companies with companies that are over 10% owned by employees.

NCEO LinkedIn Network Reviews Recent Studies and Thinking on Executive Equity Pay

A new Presidio Pay Advisors study has found that executive equity ownership among company founders has declined in pre-IPO companies. For a link to the study, log into the NCEO Employee Stock Ownership Network on LinkedIn and under the "News" tab, look for the item "New Study Reveals Sharp Decline in Founder CEO Stock Ownership at IPO." We encourage people to sign up for the rapidly growing group (i.e., the NCEO Employee Stock Ownership Network) and to invite others to do so as well. Also posted to the group was a link to a proposal to escrow some portion of executive equity compensation for some defined period of years; under the "News" tab, look for the item "Incentives for the Long Run."

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