The ESOP Association Blog

Covering ESOPs and employee ownership

April 2015 ESOP Report is Available

The April 2015 ESOP Report newsletter is now available for members. To access this month’s issue, you’ll need to sign into The ESOP Association’s website. The Member Sign In button is located at the top of the page.

To get to the ESOP Report, click Meet & Learn. A link to the ESOP Report is located on the left side menu.

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Filed under: Publication, ,

Been There; Done That. Does It Have to Be?

The following article originally ran as the President’s Page column in the February 2015 issue of the ESOP Report, the newsletter of The ESOP Association.

Human nature is often an enemy of enthusiasm. By this statement I mean it is normal for a mature ESOP company to react with a ‘been there, done that,’ attitude when pondering how to keep the enthusiasm for employee ownership vibrant among the company employees.

In recent years, when I visit ESOP companies, I often find myself talking to company executives, ESOP committee members, or HR professionals of a company that has had an ESOP for 10, 15, 20, 25, or even more years.

Often, here is the story I hear:

“Well, when we finally put the ESOP in place, needless to say, we were somewhat focused on the details of being sure we met the law and regulations. We were somewhat surprised how creating the ESOP tapped our resources, both money and time wise.

We had our ESOP advisors, and felt that they could keep us posted on all we needed to know.

We told the employees we had an ESOP, but most just scratched their heads, wondering what kind of scheme had been cooked up, as no one was seeing any extra money in her or his pocket.

In sum, we were what one might say a “sleepy” ESOP, assuming that employees would be excited about being owners, and would want to do more and be better.

After some employees left vested, and others saw that the person did get real value, interest seemed to perk up, and we could sense the employees wanted to be more attuned to what this ESOP and their role in being a beneficial owner meant.

So in about year five or so, we began to have employees exposed to other men and women like them at Association Chapter meetings, the national Annual Conference, and the Foundation’s Employee Owner Retreat, for example.

Top level executives, and average pay employees saw the AACE entries, heard about winners of AACE, ESOP Company of the Year, Employee Owner of the Year, attended the Annual Awards Banquet. Some employees became the ‘champions’ for making sure others in the company knew we were special, and everyone would benefit the better if we maximized the human side of ESOPs as a company.

So we entered AACE. We put in applications for awards with our Chapter and thus nationally. We created an ESOP communications committee; we made sure average pay employees were at meetings, networking with others in ESOP companies, and going to break out sessions about ownership culture and the human side of ESOPs.

But after five years or more of going, going, entering, entering, it sort of became old hat all of this intangible ‘love’ of being ESOP.

We need a revival so to speak. We are a good company, don’t get me wrong; but we just wonder if all of this ‘going, participating, entering’ stuff is worth it as we have been down that road, and we do not regret it; but the enthusiasm is gone.”

Well, after hearing this story, I do not jump up and down preaching that persistence is the key to an ESOP company maximizing their ownership structure; persistence is in keeping the enthusiasm alive. But the truth is each company, for many different reasons — growth, or new employees, or new business initiatives — needs to be engaged with the ESOP community year in and year out.

Accepting that the ‘old’ stuff has no more intrinsic value can diminish the subjective impact that being employee-owned has on a better performing company, with a more dedicated, and a more experienced work force, that builds wealth for all.

So, exposing ESOP people to the various tactics used to build a good company, learning about new tactics not used before, is a major way to end ennui that can arise in a mature ESOP company.

Filed under: Employee Ownership Message, Member Services, Publication, , , ,

March 2015 ESOP Report

The March 2015 ESOP Report newsletter is now available for members. To access this month’s issue, you’ll need to sign into The ESOP Association’s website. The Member Sign In button is located at the top of the page.

To get to the ESOP Report, click Meet & Learn. A link to the ESOP Report is located on the left side menu.

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Filed under: Member Services, Publication, ,

Updated Publication: Issue Brief #23

issuebriefpic#23White Paper on Recommended Procedure for ESOP Companies in Response to Auditors Request for ESOP Valuation Report has recently been updated by The ESOP Association’s Advisory Committee on Valuation.

Issue Briefs are one to three page papers discussing a variety of legal, financial and operational issues relating to ESOPs. These briefs are updated regularly. All files are available in .pdf format.

Members FREE / Non-Members can purchase Issues Briefs for $6.00 on the website

Members can visit the website to download free Issue Briefs or call 202/293-2971, email pubs@esopassociation.org.

Filed under: Issue Brief, Publication,

More Evidence of Foundation’s Impact on National Debate

The following article originally ran as the President’s Page column in the February 2015 issue of the ESOP Report, the newsletter of The ESOP Association.

More Evidence of Foundation’s Impact on National Debate

The first time I walked into a meeting of ESOP Association leaders, after spending many years around the legislative/political process in both the State of Texas and Washington, DC, I noted something differ­ent about the men’s thinking. [Sidebar: In those days, the leadership was all male.] They had two passions, not the typical one of most trade associations I had worked with prior to walking through that door to an ESOP Association governance meeting.

Yes, the men all expressed sincere, animated, inter­est in making sure that the laws that encouraged the creation and operation of ESOP companies remained in place or were improved. In other words, like most interest groups I had been around in my career up to that point, they were looking inward, at their own company, their own company’s bottom line, and at their own way of doing things in their company — the so called “style” or “culture” of the company they loved.

In hearing these expressions of self-interest, my thought was, “Yep, I have heard talk like this from many.”

But soon, I began to hear something different from these men; something one is more likely to hear at a cause oriented group — Common Cause, Right to Life, MoveOn, TEA Party, are examples, left and right — that the Association had to make employee ownership through the ESOP model national policy. Loved by the media; loved by the President; loved by the Congress; loved by academia; loved by think tanks, etc.

This cause orientation of the ESOP community has never gone away. As there are more ESOPs and more people experiencing the power of working and man­aging a well-run ESOP company, it grows bigger and more heartfelt.

This cause orientation led to the adoption of the Association’s Vision statement in 1993, and it has never really been changed. Our Vision is that the United States be a nation where a great majority of employees own stock in the companies where they work so that we have a catalyst for economic prosper­ity and employees can share in the wealth they help create.

Well the two orientations: work like heck to make sure ESOP tax benefits that enrich the ESOP company and the ESOP employees remain in place, and expand the benefits when possible, and spend resources and time to do outreach to the non-ESOP world, are not easily accommodated with the amount of money the Association collects each year. And believe me, if we said we were not going to pay attention to what the Congressional tax commit­tees were doing to tax laws impacting ESOPs because our modest resources and small number of staff were too busy putting on pro­grams convincing non-ESOP companies to be ESOPs, and paying big bucks to a national PR firm to infil­trate TV networks, major newspapers, etc. to only run positive ESOP stories, I suspect the ESOP world would dry up pretty quickly.

So, how to accomplish both passions? One, the nation is not going to love ESOPs if yours truly runs around the nation talking about how great ESOPs are; or writing pos­itive op-ed pieces for major newspapers; or having social media post­ings by thousands of ESOP fans to some elected official. No, when an ESOP advocate sings the praises of ESOPs to a non-believer, that non-believer’s response is “Duh, what does one expect from a self-serving ESOP fan; honest critique when there is ample evidence of ESOP companies, small, medium, and large, going bankrupt and employees getting zero for retirement?”

Key is knowing how big national policy develops in our nation. The typical pathway is academics, and men and women working in think tank who get interested in the issue. They do papers. The papers get published. They get jobs in think tanks and universities focusing on their published papers and research. They get tenure at their schools, or move from one school to another with more prestige.

If Democrats, when a Democrat becomes President, some are hired to work in the bowels of Treasury, Office of Management and Budget, or even on the direct White House staff, say the Council of Economic Advisors. Then their “team,” in my example, the Democrats lose, and the Republican team takes over and hires new people for jobs those Democrats had. Then in four, eight, twelve, sixteen years later, the Democrats win, and those young men and women who worked in these policy jobs years earlier, now come back at higher levels.

For example, many of the top advisors in the Obama Administration worked in the Clinton Administration at levels lower than what they have now.

For example, many of the top advisors to President George W. Bush’s Administration worked in his father’s, or the Reagan Administration in lower level jobs.

Where I am I headed with this commentary?

And what does the Employee Ownership Foundation have to do with it?

Well recently, the leftist think tank the Center for American Progress (CAP) had a summit, led by big name economic policy advisors. Summit leaders were a former Secretary of Treasury under President Clinton, and who was also a major advisor to President Obama in his first term; and a high official of the British government, Larry Summers and Ed Balls respectfully. The other fifteen summiteers developing recommendations to improve the economy mainly in the US were former Democratic governors, top news­paper commentators, economic advisors to President Clinton, and the list can go on.

What did the group recommend in their final report? Broad-based ownership, and mentioned ESOPs spe­cifically as a policy to increase broad-based ownership.

Big news because as a general rule, the so-called left has not touted employee ownership, except in rare instances by someone such as Senator Sanders of Vermont; but now it is front and center, among a liberal leaning think tank’s set of recommendations.

And by the way, the former head of the Office of Management and Budget under President Obama, Peter Orszag, published for Bloomberg an article on January 20 saying that President Obama should push to expand employee ownership, citing the book, The Citizen’s Share, by Rutgers Professors Blasi and Kruse, and Harvard professor Freeman.

What did the Employee Ownership Foundation have to do with these actions by big thought leaders endorsing more employee ownership? The Foundation did not have anything to do with the CAP summit; the Foundation had no role in any writing of The Citizen’s Share; no one in the Foundation ever said any­thing to Dr. Orszag.

But people at CAP in working slots that develop materials for men and women who made decisions at the summit have liaised with the Rutgers program which the Foundation supports, among others, with over $75,000 a year; The Citizen’s Share set forth findings, among many, that in some instances were developed with grants from the Foundation, such as grants to the National Center for Opinion Research’s quadrennial General Social Survey.

Public policy is not embedded in a nation by one magic moment. Reaching goal B is often not a straight line from A. Major changes in policy often take zig-zag routes over a long period.

But what was put forth by the CAP summit, and what Dr. Orszag said in that Bloomberg article had in a way, be it minor or major, outcomes for which the Foundation and its supporters can say, “Progress is being made in our journey to make our Vision real — and we, our Foundation, played a role.”


 

We have shared this video before but thought it was a fitting end to this column…

Filed under: Employee Ownership Foundation, Publication, , , ,

February 2015 Wrap-Up

Miss something? We’ve got you covered.

We shared a list of upcoming Chapter events for March.

Don’t forget — the Edmunson Scholarship deadline is March 6!

Find your ESOP Chapter.

ESOP Association President, J. Michael Keeling, talked about the importance of inviting your member of Congress to visit your ESOP company.

The ESOP Association submitted comments to the Senate Committee on Finance Tax Reform Working Group regarding tax reform.

Déjà Vu? Tax Reform in the Senate?

Download your copy of the February 2015 ESOP Report.

Edmunson Scholarships are open for applications.

We shared some ESOP company news.

Updated publication –> Your ESOP: It’s for all of us.

A thank you to Chapter leader, Gale Marett

The Employee Ownership Month Poster Contest opened for submissions.

The ESOP Association submitted comments to the House Ways and Means Committee regarding the state of the U.S. economy and policies that can promote job creation and economic growth.

We shared some tips for winning AACE.

The ESOP Association expressed disappointment once more over a provision in President Obama’s Fiscal Year 2016 budget that pertains to ESOPs.

Filed under: Chapter News, Employee Ownership Foundation, Employee Ownership Message, Employee Ownership Month (EOM), Government Affairs, Publication, TEA Members,

February 2015 ESOP Report

The February 2015 ESOP Report newsletter is now available for members. To access this month’s issue, you’ll need to sign into The ESOP Association’s website. The Member Sign In button is located at the top of the page. To get to the ESOP Report, click Meet & Learn. A link to the ESOP Report is located on the left side menu.

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Filed under: Publication,

Updated Publication –> Your ESOP: It’s For All of Us

Feb 2015 Pubs HighlightUpdated Publication

Your ESOP: It’s For All of Us

This brochure is designed to help companies communicate the ESOP concept to employee owners. It includes non-technical descriptions of how ESOPs work and how employee stock ownership can benefit the company and employees alike. Emphasis is placed on explaining such issues as how stock values can accumulate, the importance of productivity, and the advantages that ESOPs provide. The brochure also includes answers to nine questions commonly asked by ESOP participants.

Also available in Spanish.

Members $1 / Non-members $6

To purchase Your ESOP: It’s For All of Us, visit The ESOP Association’s website, email pubs@esopassociation.org, or call 1-866-366-3832.

Filed under: Member Services, Publication,

January 2015 Monthly Wrap-up

As it turns out, January was a busy month…

We noted some upcoming events for February

We reported that the Department of Labor will not mandate ESOP appraisers be ERISA fiduciaries

The ESOP Association filed an amicus in Supreme Court case Tibble V. Edison Int’l

ESOP Association members were named Great Places to Work!

The January 2015 ESOP Report was published

We shared a guest post from AACE Awards Volunteer Coordinator, Paul Horn – 2015 AACE Awards

We highlighted a new report from the Center for American Progress that discusses inclusive prosperity

2015 conference sponsorship were announced

We mentioned a few ways to keep up with Association updates

2015 AACE Awards category information was shared

The Two Day Professional ESOP Forum was announced

The ESOP Administration Handbook was highlighted

ESOP Experts 2015 – If you’re interested, more info here

2015 AACE Awards — we told you what you need to know to enter this year

Filed under: AACE - Annual Awards for Communications Excellence, Chapter News, Conference Information, DOL Proposed Fiduciary Regulation, Employee Ownership Message, Government Affairs, Member Services, Publication, Retirement Issues, TEA Members,

January 2015 ESOP Report

The January 2015 ESOP Report newsletter is now available for members. To access this month’s issue, you’ll need to sign into The ESOP Association’s website. The Member Sign In button is located at the top of the page. To get to the ESOP Report, click Meet & Learn. A link to the ESOP Report is located on the left side menu.

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Filed under: Member Services, Publication, , ,

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