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The Employee Ownership Update

Loren Rodgers

October 1, 2018

(Loren Rodgers)

Gender Gap in Employee Equity Compensation

In a September 17 report, The Gap Table: Analyzing the gender gap in equity, Carta (formerly eShares) and a collection of angel investors examined the "capitalization tables," which list the owners of companies and how much they own, for 6,000 of Carta's client companies representing over 180,000 employees and $45 billion in equity value. Their main findings are:

The analysis draws on employees who hold at least one stock option or restricted stock unit (RSU), so the conclusions above do not include those employees who do not hold any equity compensation. The findings indicate that women hold less equity compensation per capita than do men, and in addition, women are less likely to hold any equity than are men: "the percentage of female employees with option grants in venture-backed companies (35%) is significantly lower than the overall private labor force participation rate" of 47%.

Baker & McKenzie Releases Updated Global Equity Matrix

The law firm Baker & McKenzie released the updated version of its Global Equity Matrix. The matrix covers tax issues, securities, labor law requirements, and data privacy issues for more than 50 countries around the world.

Comments on Employee Ownership in the UK

The opening line of Merryn Somerset Webb's September 28 review in the Financial Times (subscription required) of the Labour Party's proposed policy to promote employee ownership is "If there is one thing that absolutely everyone believes, it is that employee share ownership is a very good thing." The Labour Party has proposed that all companies with 250 or more employees be required to set aside shares for employees. Webb suggests some problems with the plan, noting that some of the dividends earned by employee stock would be paid to the state and that the 10% given to workers is a transfer away from existing shareholders.

Writing in the Guardian on September 27, Nils Pratley argues that Labour's proposal could induce the Conservatives to develop their alternative approach to promoting employee ownership.

John Lewis Advertising Campaign

The flagship company of the UK's employee ownership movement, which recently rebranded itself as John Lewis & Partners/Waitrose & Parners, released a new television advertisement. The 2:30 minute video features an elementary school performance of Queen's Bohemian Rhapsody, and emphasizes that their employee-owners do more than expected, culminating in their new tag line, "When you're part of it, you put your heart into it."

Inside the Clif Bar ESOP Transaction

Inc. magazine ran a detailed insider account of the time in 2000 when now ESOP-owned Clif Bar decided against a third-party sale. At the eleventh hour, Gary Erickson, who owned 50% of the company, called off a sale to Quaker Oats. Today, Clif Bar has 1,200 employees, and an ESOP owns 20% of the shares.

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