Employee Ownership Blog

A federal judge has ruled that a trustee cannot follow employee directions on unallocated shares in an ESOP, nor use mirror voting on shares for which no directions are received.

Kemper Securities, a division of the Kemper Company, will be sold to an ESOP that will own 55% of the company. One percent will go to management and 44% to existing Kemper Company shareholders. Kemper Securities has been a lackluster performer in recent years. It employs 1300 stockbrokers.

The pilots union and USAir have agreed on a transaction that would involve substantial concessions in pay and work rules by the pilots in return for board representation and stock. The proposal would only become effective if other labor groups at USAir reach a settlement.

United Airlines has started an extensive series of print and electronic media ads stressing its employee owned character. The ads were kicked off by three page ads in major papers.

Four hundred companies have petitioned the Financial Accounting Standards Board (FASB) in opposition to that body's proposal that companies provide a footnote disclosure of the value of outstanding stock options.

Despite a government environment that ranges from indifferent to unfriendly, employee ownership is still being chosen as one of the most common routes to privatization in Poland.

The NCEO now estimates that employees own the rights to 5.8% of the corporate stock in the U.S. The estimates are based on Form 5500 filings for ESOPs and 401(k) plans and an estimate of the value of stock options granted broadly to employees.

A new survey of 3,173 companies for the Bureau of the Census looks at participation in the workplace.

In Technical Advice Memorandum (TAM) 9503002, issued January 9, 1995, the IRS said that a plan that allows employees to use their 401(k) deferrals to repay an ESOP loan does not violate ERISA.

United Airlines will remain the most closely watched employee ownership company for some time.

According to Karol Szadurski, head of UNIA, the Polish employee ownership support organization, there are now over 1,000 companies in Poland with broad employee ownership. Karol's fax to us did not indicate what percentage of these were majority employee owned.

The rhetoric about employee participation appears to have far outraced the reality. In a survey of plant and site managers at companies with more than 20 employees, only 18% report even having experimented with employee work teams.