The Employee Ownership Update
March 1, 2017
Almost half the 2017 100 Best Companies to Work For Have Broad-Based Employee OwnershipOf the 73 corporate winners of Fortune's 2017 100 Best Companies to Work For award, 36 had broad-based employee ownership plans (27 of the winners were nonprofits, partnerships, or other organizations that do not have stock). That is slightly down from prior years, when the percentage was just over 50%.
Of the plans, five were ESOPs: W.L.Gore (12), Burns & McDonald (16), Publix (67), QuikTrip (76), and Sheetz (97). Gore, Burns & McDonald, and Publix are majority employee-owned. Seventeen companies, almost all in technology, have broad-based equity grants, and most of them also have employee stock purchase plans (ESPPs). The remaining winners have some form of broad-based stock purchase plan. Baird and PCL are both majority employee-owned through these plans by a majority of their employees.
Companies have to apply to be on the list, and it is traditionally overweighted toward technology and healthcare providers.
|Company||Rank||Type of Plan(s)|
|Alphabet (Google)||1||ESPP, equity awards|
|Camden Property Trust||9||ESPP|
|W.L. Gore & Associates||12||ESOP|
|Ultimate Software||15||Equity awards|
|Burns & McDonnell||16||Equity awards|
|NuStar||19||ESPP, equity awards|
|Workday||31||ESPP, equity awards|
|Intuit||34||ESPP, equity awards|
|Goldman Sachs||51||ESPP, equity awards|
|Autodesk||54||ESPP, equity awards|
|TD Industries||64||Stock purchase|
|Publix||67||ESOP, stock purchase|
|Roche Diagnostics||73||Stock options|
|Whole Foods||75||Stock options/ESPP|
|Adobe Systems||87||Restricted stock/ESPP|
|Capital One Financial||88||ESPP|
|Fact Set||89||Stock options/RSUs/ESPP|
Supreme Court Decides Not to Hear Lehman Brothers Stock Drop CaseAfter a long road through federal courts, a suit brought by participants in the Lehman Brothers ESOP was not granted a hearing by the U.S. Supreme Court. The plaintiffs argued that the plan's fiduciaries had failed to provide sufficient information to plan participants about the company's health. Lehman Brothers went bankrupt in September 2008, leaving the company stock in the ESOP worthless. The plaintiffs lost in district court and the Second Circuit Court of Appeals, but the Supreme Court's June 2014 decision in FifthThird Bancorp v Dudenhoeffer eliminated the so-called presumption of prudence on which the two lower courts had relied. The Supreme Court vacated the Second Circuit's ruling and remanded the case to the district court, which again found against the plaintiffs. The Second Circuit agreed, and with its decision not to review the case, the Supreme Court is allowing that decision to stand.
New Chair of DNC and Employee OwnershipOn February 25, the Democratic Party elected Thomas Perez as the chairman of the Democratic National Committee. Perez is the former Obama Administration Secretary of Labor, and in that role he testified about ESOPs in Congress, advocating for them as a way to make sure that "we all succeed when we all succeed," and calling ESOPs "a very effective way of helping people, whether it's the cashier at the grocery store or the owner of the grocery store, giving them the opportunity not only to build a nest egg but [to have] skin in the game." He convened a meeting the same day to discuss ESOP, with participants including academics, organized labor, attorneys, company representatives, and nonprofits, including the NCEO. A video of that testimony is available at our esopinfo.org website.
Author biography and other columns in this series