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The Employee Ownership Update

Loren Rodgers

October 17, 2016

(Loren Rodgers)

2016 Survey on Executive Compensation Is Now Open

The NCEO's ESOP Executive Compensation Survey is the only source that exists for high-quality, reliable data that is specific to ESOPs. The NCEO asks that all ESOP companies contribute to this unique resource by completing our questionnaire, which should take no longer than 20 minutes. You may have received an email invitation directly earlier today. If not, please click here to complete the questionnaire.

The ESOP Executive Compensation Survey is designed to give you ready-to-use comparison data on:

Any and all identifying information will be removed from the data before we begin the analysis.

Companies that complete the survey will receive a free summary of the results and the opportunity to purchase the full report at a significant discount. This questionnaire is open for a limited time; we will publish results in early 2017.

Please feel free to reach out to the NCEO's research director Nancy Wiefek ( with any questions.

Media Covers Many Employee Ownership Events

Employee ownership is often covered by various news organizations, but the list was especially long—and interesting—this week. Here is a selection:

Bob Moore, who founded the employee-owned company Bob's Red Mill, won the Golden Spurtle, the prize for the winner of the World Porridge Making Championship. Moore sold his business to an ESOP in 2010.

Five employee-owned beer breweries gathered to celebrate together, in an event covered by the Coloradan. Odell Brewing hosted the event, and CEO Wynne Odell said, "This is a celebration of employee ownership of breweries . . . Odell, Deschutes, New Belgium, Left Hand, and Harpoon have committed ownership to the people who work at the company."

An article by Curt Harler in Security Information Watch notes that "ESOPs are becoming increasingly viable in the security services industry; in fact, three major firms have already successfully enacted one — Pro-Tech Design and Low Voltage Contractors, both of Minneapolis, and Tech Systems Inc., of Duluth, Ga."

The Insurance Journal covered Marsh Berry's transition to 100% ESOP ownership in an October 13 article, citing CEO John Welper: "For 35 years MarshBerry has consistently broadened ownership in order to use wealth creation as a way to attract and retain talent." He also said that 100% ESOP ownership "can be beneficial to our employees monetarily and through a more rewarding work experience."

A Forbes blog post by Darren Dahl covers the role of employee ownership at Braun Intertec, focusing on how it helped the company weather tough economic times and thrive once they were over. CEO Jon Carlson says, "Everyone loves to be an owner when times are good, but not everyone likes it when things are more challenging. That's what separates out who is more committed and willing to push the company forward."

Over the weekend, the UK's Guardian newspaper ran a story on employee ownership, focusing on the Royal Mail and a grocery chain called Asda.

Earnings Stripping Regulations Finalized; S Corporations Are Exempt from Loan Provisions

On October 13, the Treasury Department issued its final regulations on "earnings stripping," including a provision that exempts S corporations from the new regulations on related-party loans. The new regulations are designed to reduce the incentives for corporate tax inversions, but the fear in the S corporation ESOP world was that application of the rules as originally proposed six months ago could cause loans from related parties to be reclassified as equity. The exemption in the final rule exempts S corporations from reporting and other requirements.

Now Accepting Nominations for the NCEO's Board of Directors

Annual elections for the board of directors of the National Center for Employee Ownership (NCEO) will take place in January, and members in good standing are invited to nominate themselves or other members during the nomination window, from now until December 9. Nominees should review the online resources for board candidates. The NCEO's board is actively engaged in many of the organization's activities, from contributing to the content of our research and publications to assisting at the annual conference and finding new members.

Opportunities for Academics Interested in Employee Ownership

The employee ownership fellows program at Rutgers University is inviting applications from doctoral students, pre/post-tenure scholars, and experts with professional degrees in U.S. institutions in the social sciences and humanities for the 2017-2018 fellowship competition. The various fellowships focus on several aspects of shared capitalism, including ESOPs, profit sharing, and the role of investments in the development of employee ownership. Stipends can be used for research, travel, or living expenses and are awarded for residence at the scholar's home university.

Those interested should submit an email application with a 1,500-word essay and a vita by December 31, 2016, with decisions by March 15, 2017. For more information info, see the listing of all current and past Fellows.

Employee Ownership Book Published in Poland

The Polish edition of Equity: Why Employee Ownership Is Good for Business (Harvard Business School Press, 2005, updated for the Polish edition by Corey Rosen of the NCEO) has just been published. The book was written by Corey Rosen of the NCEO, John Case (a prominent journalist who has written widely on employee ownership), and Martin Staubus of the Beyster Institute.

The Polish edition features a forward from Mateusz Morawiecki, deputy prime minister and minister of development in Poland. Poland recently announced a major initiative to look at ways to create more widespread employee ownership.

A Google Translate version of the preface can be found here.

Author biography and other columns in this series

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