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The Employee Ownership Update

Loren Rodgers

June 15, 2016

(Loren Rodgers)

Employee Ownership on Fortune's List of Best Workplaces to Retire From

Fortune magazine's annual list of the best workplaces to retire from again has strong representation from employee-owned companies. To create the list, researchers examined 600 organizations for "401(k) plans, health insurance, phased retirement offerings, defined pension benefits, and internal promotion rates" and created a list of the 30 best. Those 30 include organizations (such as law firms and nonprofits) for which employee ownership is not an option. Of the 20 companies with stock, six have employee stock programs. Four are ESOP-owned (TD Industries, Burns & McDonnell, Swinerton, and Marco Products), one is majority employee-owned through a stock purchase plan (R.W. Baird), and one (Edward Jones) has broad employee ownership through stock purchases.

The article includes highlights of each company written by Fortune. The summary for Burns & McDonnell emphasizes its employee ownership. It also includes links to the underlying analysis by the Great Place to Work Institute, such as this one for R.W. Baird.

ESOPs and Worker Cooperatives Now Eligible for USDA Loan Guarantees

In Department of Agriculture Rural Business-Cooperative Services, 7 CFR Parts 4279 and 4287, the Department of Agriculture provided, for the first time, that loan guarantees may be made to ESOPs or worker cooperatives under the Business and Industry Guaranteed Loan Program. The maximum term is seven years. ESOP sellers cannot retain an interest more than five years. A rural area is "generally any area of a State other than a city or town that has a population of greater than 50,000 inhabitants and any urbanized area contiguous and adjacent to such a city or town." Guarantees are generally limited to $25 million.

New Research on Employee Ownership and Consumer Marketing

An online survey of more than 2,000 respondents found that many consumers say they would pay a premium for products from employee-owned companies. Almost half of respondents (48%) said they would be willing to pay more, and 18% percent said they would pay more than 20% extra. The survey also found that consumers were likely to see employee-owned companies as paying fair wages and benefiting local economies. The survey, which used Google Consumer Surveys, was performed by Ownership Alliance, a company that runs a marketing and certification program for employee-owned companies. More results will be in our newsletter for members.

The State of Employee Ownership Policies in Europe

The European Federation of Employee Share Ownership (EFES) released its 2016 Barometer of Employee Share Ownership Policies in Europe. The report shows a long-run improvement in the policy environment in Europe through 2008, but notes that "policy decisions were mainly negative from 2009 to 2013. Since then, most policy decisions are positive again." The report's analysis builds on the premise that the success of employee ownership policies depends on incentivizing employee stock plans.

ESOP-Owned Company to Acquire Former Wal-Mart Express Locations

Wal-Mart has closed many of its small-footprint Wal-Mart Express stores, and Arkansas-based Harps Food Stores, a 100% employee-owned company, has announced that it will purchase nine of those locations. Harps is #30 on the NCEO's Employee Ownership 100, a list of the largest majority employee-owned companies in the US, and, as with many other employee-owned companies, some of its growth is through acquisitions.

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