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The Employee Ownership Update

Loren Rodgers

December 1, 2011

(Loren Rodgers)

Berkshire Hathaway to Buy Employee-Owned Omaha World-Herald Co.

Warren Buffet, CEO of Berkshire Hathaway, announced on November 30 that his company would buy the Omaha World-Herald Company, currently 80% owned by its employees, for $150 million in cash plus assumption of $50 million in debt. The World-Herald Company owns several daily and weekly newspapers, including the World-Herald. The company employs 1,600 employees and is owned by the Peter Kiewit Foundation and by 275 current and former employees. World-Herald CEO Terry Kroeger referred to the employee ownership structure as "restrictive," and noted that "We have repurchased the company about seven times since the employee ownership plan was put in place" in 1979.

Updated Database of Employee Ownership Plans in Large Public Companies

On November 22, the NCEO released its annual update of our database of employee ownership in large public companies, the most detailed analysis of its kind. Of the companies in the Standard & Poor's 500 index of the largest U.S. companies (S&P 500) and the S&P MidCap 400, employee stock purchase plans (ESPPs) were the most common form of broad-based stock ownership, with 282 documented plans. This is a dramatic increase since the prior year (when we found 164 such companies), but it should be taken with caution, given the lack of systematic data on ESPPs. The next-most-common form of employee stock ownership is a stand-alone 401(k) plan that includes company stock. We found 30% of companies had company stock in 401(k) plans, a slight decrease from last year, when 33% of companies had such 401(k) plans. The third-most-common type of plan is a KSOP (combined ESOP and 401(k) plans), with 194 companies with KSOPs or stand-alone ESOPs. One-quarter of these plans own more than 5% of the sponsoring company's shares, which is a sharp decrease from last year's study in which one-third owned more than 5% of company shares. We found 37 companies that provide options to most employees, and 35 with other types of equity compensation plans.

The Heron Foundation supported the development of this list, which involved a complex task of checking multiple data sources.

Oxford Launches Employee Ownership Job-Creation Awards

The Sad School of Business at Oxford has announced a new award for employee ownership companies. The Owl Award recognizes job creation and companies that are 20% or more employee-owned are eligible. John Hoffmire describes the ideal candidate as meeting "5-10-15-20" criteria: firms that grew in profitability at a 5% annual rate, that added 10% in revenues, that added 15 employees, and that are 20% employee-owned. To apply, contact John Hoffmire (john.hoffmire@sbs.ox.ac.uk) and indicate what percentage of the four criteria your company meets as well as your company's industry.

NCEO Board Nominations Close December 19

People interested in serving on the NCEO's board of directors should submit their nomination before December 19. To begin the self-nomination process, view our resource page for prospective board members.

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