The Employee Ownership Update
April 2, 2012
UK Budget Proposals on Stock Options and Employee OwnershipOn March 23, the UK's Chancellor of the Exchequer announced proposals that would affect several areas relevant to employee ownership. Specifically, the proposal would provide support and loosen restrictions on Enterprise Management Incentive (EMI) stock options. The office said it would examine any existing barriers in the tax code to the formation of employee ownership companies and promised to give consideration to proposals currently under development by other government offices. These announcements come in the wake of many strong statements of support for employee ownership from senior political leaders within and outside the governing coalition.
Secretary of Labor on Re-proposal of Fiduciary RuleAt a hearing of the House Committee on Education and the Workforce, Secretary of Labor Hilda Solis responded to questions from many members of Congress about the agency's proposal to change the definition of a plan fiduciary. One impact of the originally proposed regulations would have been to deem appraisers of ESOP shares to be plan fiduciaries, but the DOL withdrew that proposal in September 2011, promising to modify and re-propose the rules later. Rep. Rush Holt (D-NJ) inquired whether the Employee Benefits Security Administration is "asking the right questions" about the fiduciary rule, and whether the agency has finished collecting data. Solis responded that the agency is still willing to collect information relevant to the rule and described DOL as "not in a hurry" to re-propose the rule. The secretary did not provide a direct answer when asked if the re-proposal would still be issued in May.
Mondragon Announces Initiatives in the U.S. and IndiaThe Mondragon Cooperative Corporation (MCC), the most famous network of worker cooperatives in the world, announced two major international expansions. The MCC, headquartered in the Basque region of Spain, employs over 80,000 people in over 150 cooperatives. On March 26, Mondragon, together with the United Steelworkers and the Ohio Employee Ownership Center, announced the release of a public-domain template for businesses, available at www.union.coop. The USW states the template is for businesses with both employee ownership and collective bargaining, and aims to create an "improved, self-reinforcing, virtuous cycle worker and customer satisfaction through higher accountability, productivity, and efficiency because all workers will have an equal equity stake in the company." Separately, the MCC announced it would open an industrial park in Pune, India, that would house eight factories within the next five years. With 63% of its sales from outside Spain, Mondragon has been seeking expansion and partnerships in other countries. According to Jose Maria Aldecoa, MCC's president, "Due to [the] economic slowdown in Spain, we are planning to expand our business in the other countries like India, China, Brazil, Mexico, Thailand, and Russia."
Deloitte Announces Global Share Plan SurveyDeloitte's 2012 global share plan survey covers the eligibility and participation, plan design, communications practices, tax compliance, country specific administrative practices, and administration of various types of equity compensation offered by multinational companies. The NCEO encourages companies that offer stock awards on a global basis to participate in the survey, which is available online. Participants will receive free copies of the final report
U.S. Workers Not Aware of Basic Facts About Their EmployersA poll of U.S. workers conducted by Harris Interactive for CareerBuilder.com found employees have low awareness levels of basic facts regarding their employers. Two-thirds are unable to provide an estimate of their employers' annual revenues. The survey, which had responses from 7,800 employees, also found that almost half of employees, even at smaller companies, had never met the CEO, and 21% said they did not know what the CEO looks like. Forty-four percent could not name a single C-level executive at their company besides the CEO.
New University Resource from ScotlandThe Co-operative Education Trust Scotland is pleased to announce the launch of its new university resource, "Democratic Enterprise: Ethical business for the 21st century." Designed for undergraduate students, Democratic Enterprise provides an open access, introductory-level analysis of democratic models of enterprise, namely cooperatives and employee-owned businesses. A supplement to any course or module that deals with these topics, it also stands alone as a template for academics who wish to incorporate material on democratic models of enterprise into their courses/modules. Available for free under the Creative Commons license, Democratic Enterprise can be accessed at this link.
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