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The Employee Ownership Update

Loren Rodgers

September 17, 2018

(Loren Rodgers)

UK Labor Party Develops Employee Ownership Proposals

The UK Labour Party's shadow chancellor John McDonnell unveiled a plan to dramatically increase employee ownership in the United Kingdom by setting up "ownership funds" in all companies with 250 or more employees. McDonnell said, "What this will ensure is that in large companies, in addition to rewarding workers with wages, they will reward them with shares that will go into a pool that will allow them to have an ownership role." Although the mechanisms are still up for discussion, possibilities include companies putting a percentage of profits into a fund to put company shares in a trust on behalf of employees.

The Financial Times cites Adam Marshall, director-general of the British Chambers of Commerce, as supporting the idea that employee ownership could be a good idea for many companies, but stating that it should be encouraged through stronger incentives rather than "via government fiat."

In His Own Words

In June, Mark and Perri Barnes sold their business, Barnes Inc., to its 175 employees. In an interview, Mark Barnes describes why he made that decision:
I didn't want the legacy to be that we walked off into the sunset with a bunch of money. I realized the sale to a third party was going to mean that a lot of these people were going to lose their jobs.... It was likely their positions would be implicated by a parent company that would have bought us out. My wife and I realized that's not what we wanted.

ESOPs and Equity Compensation: October 26 at Rutgers

The New York/New Jersey Center for Employee Ownership at Rutgers will host its second annual employee ownership conference in New Brunswick, NJ, on October 26. In this two-track meeting, the ESOP track will feature company insiders as well as experts covering the big picture, legal issues, valuation, and more. The Equity Compensation track will cover equity compensation plans, including both industry specialists and the insider perspective of people at equity compensation companies. You can register online.

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