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The Employee Ownership Update

Corey Rosen

May 3, 2010

(Corey Rosen)

British Conservative Party Calls for More Employee Ownership

The new Conservative Party Manifesto calls for widespread employee ownership in social services in Britain, an idea that has also been endorsed by the Labour Party. The Tories' new Manifesto states, "We want Britain's workers to have a stake in their company by widening share ownership and creating more employee-owned and trust-owned businesses. We want to see a step change in the role of employee-owned companies in the economy, recognizing that many entrepreneurs would like to see their companies in the hands of their employees when they retire."

IRS to Issue Preapproved ESOP Plan Documents?

Robert Richter, vice-president of SunGard and senior vice-president of the American Society of Pension Professionals & Actuaries, has told the BNA Pension Reporter (April 20) that the IRS is considering providing preapproved plan language for ESOPs. The IRS does not currently allow ESOP prototype plans, although it does for some other kinds of ERISA plans. While the IRS probably would not issue an actual model fill-in-the blanks plan, it could provide preapproved language for inclusion in ESOP plan documents that would make the process easier for companies adopting the plans. One danger is that some companies might rely too heavily on standard language, when what they really need is some variant that will be better suited to their needs. But having more certainty about what will work with the IRS and language that less-experienced providers can use so that they do not make errors would be very valuable. Richter also notes that a major benefit "to practitioners (and ultimately employers) is that they won't have to incur the expense of dealing with the restatement deadline under the five-year cycle for qualified plans. By fitting them into the six-year cycle for pre-approved plans, most ESOPs would have the same restatement deadline and wouldn't need to vary language based on the latest cumulative list."

SharesPost to Work with Brokers

SharesPost, one of a number of new companies that provide a way for buyers to purchase stock or options from employees of closely held companies, has announced that it will now be working with registered brokers to help facilitate the transactions. The move comes as SharesPost, SecondMarket, and other companies moving into this field have been successful in arranging for hundreds of millions of dollars in sales of stock held by employees in closely held companies that appear likely to go public or be acquired.

Does Your Company Have a Wellness Program or Innovative Health Insurance Program?

The NCEO is putting together a resource on innovative wellness and health insurance programs in employee ownership companies. If your company has a program like this, we would love (and need!) to hear from you. Contact me directly at or (510) 208-1314.

Annual Conference Has Close to Record Attendance; Loren Rodgers Announced as New Executive Director Starting in 2011

The NCEO/Beyster Institute Annual Conference held earlier this month in Minneapolis had 814 attendees, just below the all-time record. Thanks to everyone who attended. Plan ahead for next year's meeting April 13-15 in Denver, with a preconference session on equity compensation on April 12. Downtown Denver has become a premier destination, with two new acclaimed art museums, Coors Field, upscale shopping and restaurants, a major arts center, and more. Spring skiing will still be available as well.

At the conference, NCEO board chairs Cecil Ursprung and Victor Aspengren announced that the Board had selected Loren Rodgers, presently the NCEO's research director, to be the new executive director starting at the 2011 annual meeting. I will then become an NCEO staff member, working about four days a week on a largely volunteer basis for what I hope will be many, many years. The board, staff, and certainly I are all very confident with this transition plan and know that Loren will do an excellent job.

Smiley Fellowship Winner Announced

Jefferson Decker, a lecturer in history and the Hertog Postdoctoral Fellow at Columbia University, has become the first Smiley Fellow in economic history. He will study the political history of investment culture and retirement security in the United States during the 1982-2000 bull market in equities. The Smiley Fellowship was created by former NCEO board member Robert Smiley, founder of Benefit Capital Corp., to encourage the study of significant issues related to broad-based employee ownership in American history.

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