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The Employee Ownership Update

Loren Rodgers

September 16, 2013

(Loren Rodgers)

PricewaterhouseCoopers, NASPP Survey Shows Global ESPP Participation Declining

In a survey of 350 multinational companies in a variety of countries (the 2012 Global Equity Incentives Survey), PricewaterhouseCoopers and the National Association of Stock Plan Professionals (NASPP) have found that in ESPPs, there has been "a steady decline in global participation from 2007 through 2012. In particular, the majority of companies that previously reported employee participation rates of 26%-50% now have 0%-25% of eligible employees participating in their ESPPs. Of those companies that have historically offered an ESPP, in the past year a large majority (82%) continued to offer the plan. However, 9% of companies chose to eliminate it in the past year, while 38% eliminated their ESPP in the past 2-3 years." The 2012 Global Equity Incentives Survey also reports on a variety of other issues, particularly on how global companies are complying with local laws.

Employees to Receive Shares in UK's Royal Mail

The government of the United Kingdom announced that 150,000 employees of the Royal Mail will receive free shares when the postal service's shares go public, which is expected to happen in the next few weeks. Employees have begun to receive formal notice of the offer, which will result in employees owning 10% of the company's shares. MP Michael Fallon (Conservative), announced the IPO in the House of Commons, observing that "this is the largest employee share scheme of any major privatisation for almost 30 years." The Royal Mail's CEO, Moya Green, said, "By owning 10 per cent of the company, together we will have a meaningful stake in the business. I think this will engage everyone and encourage us to continue to work together to build a great future for Royal Mail."

DOL Sues California Pacific Bank

The U.S. Department of Labor sued San Francisco—based California Pacific Bank, including its board of directors and plan trustees, saying the bank violated ERISA by failing to distribute account balances in cash following the 2010 termination of the ESOP. The DOL alleges that the ESOP fiduciaries improperly transferred or allowed the transfer of $150,000 from the plan to the bank, and that following the termination of the ESOP, the plan held its assets in non-interest-bearing accounts. The DOL claims that these failures cost employees as much as $1.4 million.

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