The Employee Ownership Update
November 17, 2014
Midterm Elections and ESOPsA number of supporters of ESOPs were involved in this month's elections, but three are worth noting in particular. First, the expected majority leader of the Senate will be ESOP supporter Mitch McConnell (R-KY), who beat challenger Alison Lundergan Grimes. Second, Kansas Republican Senator Pat Roberts, a member of the Senate Finance Committee, defeated independent Greg Orman in what had been expected to be a close race. Finally, the Louisiana Democratic Senator Mary Landrieu will face Republican Bill Cassidy in a run-off election in which she is considered an underdog.
Virgin America's Employee-OwnersWhen Virgin America took its stock public on November 13, 13.3 million shares became available to the public markets. In an unusual features of the deal, an employee ownership plan sold shares worth just under $5 million. Virgin America offered its stock at $23 per share, and it closed today at $32.68. Its employee ownership is through a limited liability company, VX Employee Holdings, not a traditional equity compensation plan or ESOP.
Twins and Employee OwnershipIn a Forbes blog post, Mary Josephs reports the story of two twin sisters who both applied for jobs at employee-owned WinCo Foods in 1991 at the age of 19. Because of a store policy at the time against nepotism, Cathy got the WinCo job. She still works there today. She has almost $1 million in stock through the company's ESOP, and she says she could retire today.
Her twin sister Deborah's job path was different: she worked "three years at the regional telephone company; some time at a department store and at a pharmacy; finally at a doctor's office for 17 years. By 2008, Deborah...had about $30,000 in a retirement account, and it was mostly in stocks. The market collapse roughly cut that total in half."
Josephs quotes Cathy: "This is the chance of a lifetime . . . When people quit WinCo, I ask them, 'Are you crazy?'"
Canadian ESOP Conference: June 2015The ESOP Association Canada is hosting its first conference June 3 to 5, 2015, in Winnipeg. Speakers will include representatives of successful Canadian employee ownership companies such as the Flynn Group of Companies and POS Bioscience, practitioners from a variety of fields, and the NCEO's Loren Rodgers. In Canada, nearly 40% of Profit Magazine's Fastest Growing Companies offer some sort of employee ownership program.
Special early pricing and more information are available for those who register by December 16 at www.esopconference.ca.
The NCEO's New OfficeToday is the first day that the NCEO is operating from our new offices. All of our contact information remains the same, but we have now completed our very short move to downtown Oakland's historic and LEED-certified Uptown Arts Building, at 1629 Telegraph Avenue, Suite 200.
Author biography and other columns in this series