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The Employee Ownership Update

Loren Rodgers

November 15, 2018

(Loren Rodgers)

Colorado Governor-Elect Appoints Employee Ownership Advocate to Transition Team

Jared Polis (D), recently elected to be Governor of Colorado, has begun to name his transition team. The economic development and labor committee includes Halisi Vinson, the executive director of the Rocky Mountain Employee Ownership Center.

District Court Dismisses Lawsuit Against ESOP Fiduciaries at Lifetouch

On November 7, Judge Joan N. Ericksen of the U.S. District Court for the District of Minnesota dismissed a lawsuit filed by Lifetouch ESOP participants who claimed that they were not protected against losses as the photography company faced challenges to its business model. The stock in Lifetouch's ESOP declined in value by $840 million from 2015 to 2018. The judge ruled that the decline in stock value was a "result one would expect from lawful conduct," and further ruled against the plaintiffs' that Lifetouch's stock was too risky for a retirement plan. Many such "stock-drop" lawsuits have been won by defendants since the 2014 Supreme Court case Dudenhoeffer v. Fifth Third, but this case is different from most because it involved a privately held company.

Marianne Snook to Manage the NCEO's CEPI Exam Prep Course

The NCEO is delighted to welcome Marianne Snook as the new manager of its exam prep course for candidates for the Certified Equity Professional (CEP) designation, the industry-leading standard for stock plan administrators. Marianne was a founder, in 1999, of Stock & Option Solutions, Inc. (SOS) from which she retired as its chief executive officer in 2014. SOS consults and outsources for companies with equity plans, helping them to find short- and long-term solutions to assure proper delivery of its programs. She will be taking over for Achaessa James, who built the course to its current market-leading position—over 80% of CEP candidates use the course. The CEP certification is a program of Santa Clara University's Certified Equity Professional Institute.

Employee-Owned Hypertherm in the Forefront of New Hampshire's Program for "Recovery-Friendly" Workplaces

A November 14 article in the New Hampshire Union Leader described the central role employee-owned Hypertherm is playing in the state's effort to create "recovery-friendly workplaces" (RFWs) in response to substance-use disorders. Hypertherm was one of the first companies in New Hampshire to earn the RFW designation, and, in the words of Matt McKenney, Hypertherm's workforce development manager, "As soon as you start to think of [a substance-use disorder] as someone being sick or ill or hurt, it becomes a really simple equation to care for somebody and put them in a situation where they are safe but still useful to our organization."

Investing in Publix Super Markets?

John Persinos at Investing Daily wrote on November 7 about Publix Super Markets, currently no. 1 on the NCEO's list of the largest majority employee-owned companies in the U.S. He analyzed the performance of the privately held company, comparing it to publicly traded rivals such as Kroger, Target, and Costco. His analysis was inspired by rumors that Publix might be considering an initial public offering (IPO) in 2019. (Note: the NCEO has no information to support or deny those rumors.)

Animation Studio Becomes Employee-Owned

Aardman, the Bristol, England-based studio that created Oscar-winning animated films including Wallace & Gromit, announced on November 10 that it is becoming employee-owned. Peter Lord and David Sproxton, the two founders of the 130-employee company, said "[W]e are very excited by the prospect of seeing Aardman roll far into the future under this arrangement and can rest easy that those four decades which have slipped by have paved the way for many more years of great creativity."

Training for Inside Fiduciaries: November 26 to 28

The Beyster Institute at the UC San Diego's Rady School of Business will host a special session of its Certificate Program for Non-Professional ESOP Fiduciaries on November 26 to 28 in La Jolla, Calif.

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