The following items appeared in 2009.

January 2009

The following articles appeared in January 2009.

Tuesday, January 06, 2009

New 111th Congress: Uncertainty for ESOPs.

Prescription for Action—the Tried and True

The 111th Congress, First Session, of the United States of America, begins today, January 6th. [Despite common understanding, the word “congress” applies to both the Senate and House of Representatives, even though the public calls their Representative in the House a Congressman, Congresswoman, or even Congressperson, and their Senator, “Senator”.]

Under our Constitution, each Congress lasts two years, at which time all members of the House stand for election, and one third of the Senate does, as a Senate term is six years, and a House term is two years.

You might think all of this “procedural” talk wastes your time as an ESOP advocate, but just as in your company, if you do not understand the rules and policies you will make mistakes both for yourself, your colleagues, and your company.

For example, the pro-ESOP legislation introduced in the 110th Congress, which was 2007 and 2008, is no longer; it does not exist anymore. Thus, pro-ESOP advocates cannot ask their Representative or Senators to “support” S. 1322 by Senator Lincoln [D-AR], or H.Con. Res. 333 by Representative Hinchey [D-NY], or H.R. 6419 by Representative Rohrabacher [R-CA]. If these Representatives and Senator Lincoln introduce pro-ESOP legislation in 2009, their proposals will have new numbers.

For example, there are new members of the key tax committees of Congress, on both the Senate and House side, among both Democrats and Republicans.

Some ESOP advocates for the first time will have their Representative or Senator be a key decision maker on ESOP proposals, both pro and con, whereas some ESOP advocates who have diligently cultivated the pro-ESOP message with a member of Congress from their area will now not have a direct pipeline to a key member of the tax committees.

ESOP advocates who are “dyed in the wool” pro-Republican will be frustrated when your government relations agents in DC tell the truth that in today’s world, it will be the Democrats on the tax committees that make the final decisions, and Republican allies will only have “influence” if given the chance to express an opinion behind closed doors.

But even with the new Congress, new members, new challenges, some things will not change, including how to have the ESOP position “win.”

Never has the ESOP position, since the retirement of former ESOP godfather Senator Russell Long retired, been “won” in Washington, DC.

It will be won in the cities, and towns of America, only if ESOP companies, both leadership of the companies, and hopefully average pay employees, directly present the story of how the ESOP works positively in their communities in the cities and towns where they live—I mean directly to the member of Congress when he or she is home.

Never ever forget Senator Long’s words of wisdom – the most important thing to a member of Congress is being elected; and the second most important thing is being re-elected.

But this does not change either—members of Congress are people just like you. They do not respond favorably to someone who acts as if he or she is “entitled” to tell the member of Congress what “works” for them. Since the days of Plato, there has been an age old argument – does a representative in a Republic only vote the way the majority of people he or she represents wants, or does the representative have a higher duty to do what he or she sincerely believes is best after review of data and information that citizens do not have, or have no time to review. [Interestingly, there is a buzz among internet fans that in the 21st Century all citizens will have access to the same information as elected representatives, and therefore the relationship of representative to the represented will change. In this camp, having read the blogs, and the mean spirited and often crude remarks made by “educated” internet users, I hope not.]

So, ESOP advocates, if you can’t be civil around politicians, and respectful, leave the hands-on lobbying to others.

Finally, be armed with a plan. Have a specific request. Do not waste a member of Congress’s time, just like you do not want some salesperson to waste your time.

Advocacy and marketing 101 are the same. If you wonder how to lobby, just read the classic Dale Carnegie How to Win Friends and Influence People. Then learn what the pro ESOP agenda is, be it an offense for new and better ESOP laws, or the defense to stop bad ESOP proposals.

In this regard, keep an eye on The ESOP Association’s website for the advocacy kit, and breaking news.

Yes, today the 111th Congress begins; but never forget the more things change, the more they stay the same.

Wednesday, January 14, 2009

Positive News to Share

We thought it would nice share a few positive ESOP articles with you.  The website, Axiom News – http://www.axiomnews.ca/ – has several ESOP centered articles featured on the homepage of their website which also includes articles on ComSonics, Inc. in Harrisonburg, VA, King Arthur Flour Company in Norwich, VT, and Jackson’s Hardware in San Rafael, CA.

With so much negative news these days about the economy, we thought it would be a good time to share news of this sort and to remind everyone that there is no better time than now to share your positive stories about the ESOP and its impact on your employee owners.

Wednesday, January 21, 2009

Employee Ownership Questions to Candidates for European Union Parliament

The European Federation of Employee Share Ownership (EFES) stated in a recent email to its members that it is asking candidates for the European Union (EU) Parliament to develop an EU employee ownership policy. [The Employee Ownership Foundation, affiliated with The ESOP Association, is a full member of EFES because the 21st Century economy is a global economy.] Such a policy would be in sync with information from several EU Parliamentary reports written by policy committees of the EU Parliament.

If you would like to read more about the EFES’s efforts, you can view the group’s political roadmap for employee ownership in Europe here – http://www.efesonline.org/ROADMAP/EN.htm.

In particular, the EFES, in its efforts to push the EU Parliament to develop pro-employee ownership policies for its member states, has called for six proposals, which can be found here – http://www.efesonline.org/2009/MANIFESTO/EN.htm.

One proposal calls for a “European ESOP” similar to the typical U.S. ESOP.

Why is this work of our European ally EFES important to us in the U.S.? One, it is gratifying to see a pro-employee ownership message being promoted to the EU Parliament. Two, we note once again that it is ironic that European decision makers take seriously the idea of more employee ownership as good policy while it seems U.S. leaders put employee ownership in their “out of sight,” “out of mind” category.

We believe it would be a shame to see Europe take the lead for the ESOP-like model of employee ownership when the concept was developed in the U.S.

What are your observations on these developments?

Monday, January 26, 2009

Employee-Owned Companies Abound on Fortune Magazine’s Top 100 List for 2009

The ESOP Association sent out the following press release this morning and we wanted to share it on the blog as well.

The recently released list of top 100 companies by Fortune magazine shows that employee owned companies in the U.S. are becoming more prominent. Approximately 14% of the companies on the 2009 list are employee owned.

According to Fortune, a company has to be at least seven years old and have more than 1,000 U.S. employees to be eligible. Fortune conducts an extensive survey of employees to name the top 100 companies. Two-third of the score is based on survey responses and the rest on a Culture Audit which includes information about pay, benefits, demographics, and communications practices, among other criteria. The Great Places to Work Institute created the survey used by Fortune. A list of the top 100 companies can be found here – http://money.cnn.com/magazines/fortune/bestcompanies/2009/.

“Employee owned companies are out there doing exactly as intended, creating great places to work,” said J. Michael Keeling, president of The ESOP Association. “In 2008, an economic performance survey conducted among ESOP Association members showed that 92% of companies believed that employee ownership was good for business. With this in mind, our nation’s leaders should be looking to these companies and examining business practices and culture to help make our economy stronger.”


February 2009

The following articles appeared in February 2009.

Wednesday, February 04, 2009

AACE Awards 2009

We are once again approaching the AACE (Annual Awards for Communications Excellence) Awards deadline. Add March 2, 2009 to your calendar now!

Additional information about the AACE Awards can be found on The ESOP Association’s website at http://www.esopassociation.org/resources/resources_AACE.asp. The 2009 brochure, which contains this year’s guidelines, can be found there as well.

The AACE Awards are a wonderful way to document the communications work of your company and to take a look ahead for the New Year. If you’ve never entered, this should be this year!

The AACE Awards are sponsored annually by The ESOP Association to recognize the outstanding communications programs of its members. AACE winners are chosen by a panel of five judges made up of both management and non-management employee owners, each of whom has demonstrated active experience and interest in the field of ESOP communications. All entries are displayed at the Association’s Annual Conference in Washington, DC.

If you have questions concerning the AACE Awards program, please contact Pat Barnes at email at artpbarnes@comcast.net.


Monday, February 09, 2009

Good ESOP News

We wanted to share with everyone the following link to an article on Axiom News which talks about the power of employee ownership.

ESOP companies mark the Fortune 100 list
There is power in ownership: Keeling
Friday February 6, 2009 — Camille Jensen


There is no better time than now to share your positive stories about the ESOP and its impact on your employee owners. With all the negative news about the economy, a little good news can go a long way.

Wednesday, February 11, 2009

Question from a Reader – What Do You Do?

The following question is from an ESOP Association member. This is a question/comment we are asked numerous times a year. We wanted to post it here as a topic of discussion so members of the community can share their experiences and ideas for getting employee owners involved and excited about the ESOP.

My company is 100% employee owned and has been for the last five years.  Unfortunately, that does not mean a lot to the staff because it is not real to the majority of the employees.  Over the years, we have had breakfasts, lunches, October Awareness Month Celebrations with the distribution of physical things like sweatshirts, t-shirts, coffee cups, etc. for the staff with ESOP and our company name on it.  The employees know that we are employee owned, but do not equate the activities (i.e. lunches/breakfasts) and gifts with anything in particular.  We do issue “Certificates of Ownership Stock” to those that have earned them once a year, but it still does not mean anything to them unless they leave the company and cash out their stock.

What I am getting at is how do ESOP companies get the message out to where it means something to the employees, but also provides a return on investment?  If I add up all the $$ that our company has spent on ESOP activities, I do not think that we had a significant increase in sales due to these activities.  My goal in this economy is to find a way to benefit the staff and receive a return on our investment.  Don’t get me wrong, I am always for BBQ lunches and other moral boosters, but what have you done to increase your return on investment?

Often the best ideas come from networking, talking to peers, and hearing from companies that have successfully created and implemented ROI programs. If you are interested in getting involved and learning from your peers in the employee ownership community, check out some of the Association’s local Chapter events and national events such as the Annual Conference that focus on ownership communications including the AACE Awards – http://www.esopassociation.org/chapters/chapters_calendar.asp and http://www.esopassociation.org/meetings/meetings_annual_Conference.asp.

Wednesday, February 18, 2009

Reminder – Edmunson Scholarships Available for 2009

The Charles E. Edmunson Scholarship Program, the oldest and most recognized of the Employee Ownership Foundation’s programs, will once again award scholarships to winning ESOP companies to help defray the cost of sending non-management employee owners to ESOP Association programs and seminars focused on ownership education.

For more information on the scholarship program or for information on how to apply, please contact Gwenn Rosenthal at gwenn@esopassociation.org or call 202/293-2971.

Don’t forget, if you are a 2008 Scholarship winner, use your scholarship before it expires in May 2009!

Wednesday, February 25, 2009

Steve Sheppard – On the Road Again

Steve Sheppard is a frequent speaker to employee-owned companies and the ESOP community at large on the financial and transformational potential of employee ownership.

Now, in partnership with the Employee Ownership Foundation, Steve is scheduling speaking engagements with business leaders and opinion makers who are not aware of the power of employee ownership through an ESOP for employees and companies sponsoring ESOPs.

Steve, former CEO of the employee-owned Foldcraft Company in Kenyon, Minnesota, will travel the U.S. speaking to local groups, such as the Rotary, Lions, Kiwanis, Chambers of Commerce and other civic groups about employee ownership.

Steve’s presentation will be at NO CHARGE to the sponsoring organization.

If you would like additional information on how to contact Steve Sheppard to speak at your community event or to a civic organization, please send an email to info@employeeownershipfoundation.org.

For additional information about Steve’s speaking tour and presentations, please visit The ESOP Association’s website and download a copy of the brochure at http://www.esopassociation.org/pdfs/SheppardBrochure.pdf.


March 2009

The following articles appeared in March 2009.

Wednesday, March 04, 2009

‘World’s First’ Professorship in Employee Ownership Endowed at Rutgers

It has always been a dream of the employee ownership community to have an employee ownership endowed chair at a university. Thanks to Dr. J. Robert Beyster and the Foundation for Enterprise Development (FED) one has been established at Rutgers University. See the press release below for more information.

‘World’s First’ Professorship in Employee Ownership Endowed at Rutgers

March 03, 2009

NEW BRUNSWICK, N.J. – The Foundation for Enterprise Development (FED) has committed $2 million – the largest gift in the history of Rutgers University’s School of Management and Labor Relations (SMLR) – to establish the J. Robert Beyster Professorship of Employee Ownership. The Beyster Professorship is SMLR’s first endowed professorship and, as far as can be determined, it is the first named chair in employee ownership established anywhere, according to Dean David Finegold.

Dr. Beyster is founder and chairman of the private operating foundation established in 1986 to help promote the concept of broad-based, participative employee ownership and entrepreneurism, especially to advance science and technology innovations with impact on nationally important interests. He founded Science Applications International Corp. (SAIC) in 1969 and is its former chairman and CEO. Under his leadership, SAIC grew to over $7 billion in annual revenues and more than 40,000 workers, becoming the largest employee-owned research and technology company in the U.S.

Previously, the FED made a $150,000 gift to SMLR to recognize the school’s leadership in the growing worldwide network of employee ownership researchers and practitioners supported by the foundation. The gift provides funds to support young scholars studying employee ownership and related ideas, such as profit sharing and broad-based stock options, through fellowships, including Beyster Postdoctoral, Graduate and Visiting Graduate fellowships, as well as a Visiting Professorship.

“I wanted to establish a chair in employee ownership to provide the resources for a major professor in the field to conduct research,” Dr. Beyster said. “Rutgers has a long-standing interest in employee ownership and has demonstrated its commitment to the field.”

Added FED President Mary Ann Beyster, “The foundation’s relationship with the professors at the School of Management and Labor Relations is more than 25 years old, and we continue to be impressed by the caliber of research and teaching in the field of employee ownership and shared capitalism. Success for our next generation of leaders will largely depend on their ability to attract and guide people – human capital. Through this chair, we hope to help Rutgers shape and guide future leaders on the power of ownership.”

“We are delighted to receive continuing support from Dr. Beyster and his daughter Mary Ann Beyster, especially during these challenging economic times,” said Finegold. “This gift comes at a particularly opportune time for our country, when we are asking such fundamental questions about our models of corporate governance as how the pie can be fairly divided among shareholders, executives, managers and workers in the corporation, and how to make sure that workers do not bear excessive risk.

“The research that the Beyster Professor conducts can help shape new approaches to prudent and responsible broad-based sharing of the results of corporate performance that could help the U.S. emerge from this deep financial crisis.

“An endowed professorship is one of the highest honors a university can bestow,” Finegold continued, “and is reserved for an eminent scholar whose work and research significantly advances the discipline. The Beysters’ generosity is recognition of the unparalleled level of expertise that our school has in the area of employee ownership, profit-sharing and broad-based stock options.”

Finegold added that the process for selecting the first J. Robert Beyster Professor, who will be appointed for a renewable five-year term, will begin in the fall of 2010. Developing and teaching undergraduate and graduate-level elective courses focused on employee ownership and related issues, and mentoring Beyster fellows at Rutgers and other academic institutions will be among the named professor’s responsibilities, he said.

The Beysters have been interested in SMLR’s work since the late 1980s, especially the research of professors Joseph Blasi and Douglas Kruse, who collaborated on the books The New Owners (HarperCollins, 1991) and In The Company of Owners (Basic Books, 2003, with former Business Week associate editor Aaron Bernstein). The recent book examines how high technology companies like Adobe, Cisco Systems, Google, Intel, Microsoft and others share profits and stock options with workers while often limiting their exposure to higher risk company stock investments.

Contact: Steve Manas
732-932-7084, ext. 612
E-mail: smanas@ur.rutgers.edu

Thursday, March 05, 2009

Wall Street Journal Story, Page 1 of Style & Homes Section, Blasts Company Stock

Before we get started, this is the link to the story if you would like to read it–

The Wall Street Journal

March 5, 2009

Despite Risks, Workers Guzzle Company Stock

Participants in 401(k) Plans See Safety in Employer Shares;

No Other Options for a Match


First and foremost, the story is basically a huge diatribe against company stock but they are only looking at public companies in this particular story.

Diversification. We have no argument with diversification. In fact, it’s something we talk about frequently in the employee ownership world and something we encourage our members to discuss with their employee owners.

Let’s move on –

1.) This article leaves the impressions that all company stock is bad in every situation. This is simply not the case. We know many companies, very good companies, that use company stock. Yes, the market is in shambles but why chastise people who want to move their money into what they feel is a safer investment at this time.

2.) This article implies that all average pay employees are stupid and don’t know anything about their own money and need experts to tell them what to do.

3.) Finally, a careful reading shows that experts in this article are trying to market automatic out of company stock programs. Of course they would be upset with individuals wanting to shift money into company stock as such a move can hit the financial advisors ‘bottom line.’

There’s a lot of uncertainly in the market these days and there are no right answers. Articles like this are just another elitist shot at individuals who are trying their best to make the most out of a collapsed publicly traded stock market.

Wednesday, March 11, 2009

Shared Capitalism Through Employee Ownership Award

The Shared Capitalism through Employee Ownership Award, a new annual award for promising dissertation research, has been officially launched. The purpose of the award is to identify innovative research in business or business-related disciplines concerned with the impact or effectiveness of shared capitalism and/or broad-based ownership strategies in combination with participative workplace practices.

The recipient(s) will receive recognition at an awards ceremony hosted by the Aspen Institute to be held in New York City in the fall of 2009, introductions to professionals and/or professors in the winning students’ fields of interest, and a stipend in the amount of $1,500. No budgetary restrictions will be placed on the use of these funds.

Applications for this award must be received on or before Friday, March 27, 2009.

For additional information about the award and application instruction, please visit the website at http://www.aspencbe.org/awards/dissertation/2009EOApp.html.

The award is co-sponsored by the Employee Ownership Foundation, the Aspen Institute’s Center for Business Education, and the Foundation for Enterprise Development.

Tuesday, March 24, 2009

Too Much Us Versus Them Going On

This President’s Page column by ESOP Association President J. Michael Keeling originally ran in the March 2009 issue of the ESOP Report, the newsletter of The ESOP Association. We are reprinting the column on the blog.

As I travel north and south, east and west, there is an attitude among nearly all I speak to that can make our ugly economic situation even uglier. What am I talking about?

I am talking about people saying, “It is Wall Street people’s fault;” or “It is those laws trying to help African Americans and Hispanics own their own homes;” or “It is that awful President Bush and the idea that everyone should be owners;” or “It is that President Obama’s fault because he acts so high and mighty;” or “It was the mortgage lenders fault…or bankers…or insurance people…” and so on and so on.

Everyone agrees that people make mistakes; everyone agrees that some people are just not good people, and for a buck will lie about a mortgage application, lie about investing people’s money safely, and lie about their desire to be a good CEO and be an inclusive leader.

I’ve been around too long to be Mr. Pollyanna.

But when people always blame “them,” it is not too far from valuing revenge more than rolling up sleeves and working, with respect towards all, and getting through tough times with civility and common sense prevailing.

Let me tell a little story to make the point.

Fifteen years or so ago, I attended one of the Association’s Employee Owner Retreat (EOR) programs. The curriculum, as developed and presented by staff of the Ohio Employee Ownership Center based at Kent State University, includes a wrap up session asking the 50 or so attendees to address some really interesting business problems faced by a fictional company, similar in size and revenue to most Association members.

As an observer, I sat with the group that was representing the accounting department of the company, which was facing severe cash flow problems despite record sales, due to over aggressive sales not meshing with the production operations, and collection problems beyond comprehension.

One participate quickly suggested that what they should do as employee owners is give the CEO an ultimatum—either he fix the problems in 90 days, or he be fired and a new CEO take over.

I could see the look on the face of one participate, from an ESOP company where the ownership culture was real, turn to one of shock. In a flabbergasted tone, she blurted, “How can you say that? We are in this together, we and the CEO. We have to work together to fix the problems, not engage in threats and recriminations!”

Do you get the point? Blaming all our ills on the men and women who work on Wall Street for Main Street’s problems is ignoring the fact that the solutions for Main Street are on Main Street. In turn, all the Wall Street people finger pointing at the poor people buying houses they could not afford, or at President Obama for not giving more money to Wall Street firms and banks with no strings attached, do our nation no good either.

Sure mistakes have been made, and there were inexcusable excesses. But what this country needs is more folks like the person at the Employee Owner Retreat—we Americans are in this together, and it is up to us, not someone else, to fix the problem—all of us.

It’s too bad more of that ownership culture attitude displayed many years ago at the EOR is not more evident as I travel around the country.

Friday, March 27, 2009

Sustainability – What it really means for an ESOP company

The following comments were shared with us by T. Keith Robertson, Information Systems Manager at ComSonics, Inc., located in Harrisonburg, VA. Mr. Robertson made the following presentation about sustainability at ComSonics’s Annual Participants Meeting held in late January 2009. The Annual Meeting is open to all participants of ComSonics, even those that have left or retired but are still awaiting their distributions. We are running the information below with Mr. Robertson’s permission as we think the message of sustainability is an important one in our community and one that deserves more discussion.

Thank you to Mr. Robertson for his willingness to share his thoughts with the Employee Ownership Blog.

Sustainability is a big buzzword in the ESOP community. At this point many people are beginning to wonder how companies such as ComSonics (And note that in 2008 The ESOP Association presented Silver ESOP Awards to 125 ESOP companies.) have remained an ESOP for over 30, since many are struggling with administrative issues after only ten years.

The initial perception regarding long term ESOPs was that if a company could address the challenge of repurchase obligation they would have little else to worry about. Then came the question of leadership succession as companies transitioned from the original, pro-ESOP owner to his or her successor that may not be so keen on employee ownership, or may approach it in a different way. As we have seen here at ComSonics, Dennis (Dennis Zimmerman, president and CEO of ComSonics, Inc.) supports our ESOP in ways different from our original founder Warren Braun, but support it he does. His encouragement comes in more subtle ways in the background and in the boardroom, as he allows others to carry the flag and wave the pom-poms. Many other ESOPs have found this succession to be much more difficult and we are fortunate in how things have developed in our company.

But aside from these technical and administrative issues, how has our ESOP remained in a world where many ESOPs terminate their plans every year? I believe it is because our workforce has continued to convey a message to new employees that working in an ESOP is special. They have also realized and passed along the fact that our ESOP can provide them with a retirement they otherwise may never have seen.

I can assure you that when I began in 1983 I had very little comprehension of what I would need for retirement and NO understanding about ESOPs. Within five years I found myself campaigning to be on the EAC, (ComSonics’s ESOP committee) which kicked off quite a learning experience, one that continues to this day.

However, mine is not a typical tale. Most people go through their work lives without digging very deeply into all of the opportunities available to them. In fact, many workers at ESOP companies don’t learn much at all about their retirement until they reach age 55 and receive a letter from the administrator asking if they’d like to begin diversification.

This is unfortunate because there is much to be learned about how each of us can positively or negatively affect our company and our ESOP. Yes, I said our company AND our ESOP, as the two are inextricably joined.

Another point in this discussion regards the haves and have nots, a point of contention that is becoming widespread in long term ESOPs. It seems that some of our employees believe that the ESOP will never amount to much for them personally since they didn’t get in “on the ground floor.” I believe this is very shortsighted and would like to provide an example.

ERISA (Employee Retirement Income Security Act) was amended in 1997 to allow an ESOP to become an S-corporation. As we were working through our S-corp process we knew that it would be better to repurchase the 1.4% of stock that was owned outside of the company. (Note that many years ago, before our mandatory buy back policy, departing employees could take their stock with them.) Although the outside shareholders were offered a 59% premium over the current value, and many of us felt this was a bit excessive, the advantages we would gain from becoming an S-corp far outweighed the premium price, and the company proceeded to reacquire all outstanding shares.

We now have a stock price that is 464% above that “premium” and know we got quite a good bargain, but in 1997 none of that was certain. The cable industry was in another of its downturns, so who knew what the future held?

That’s the point; who really knows what the future holds? No one does, but it certainly can be promising. And that promise can only be fulfilled by our combined efforts. The exciting part is that the growth resulting from our work will not benefit a few wealthy owners, or a bunch of nameless outside stockholders, but instead will benefit all of us.

We have a tremendous opportunity available that many millions of American workers do not enjoy, that we work for ourselves, that our “sweat equity” puts money in our pockets, not someone else’s. You each must seize that opportunity and continue to increase the value of ComSonics’s ESOP, whether you have been here a year, a decade, or even if you are one of Warren’s “boys from the basement.”

ComSonics, Inc. creates solutions for the cable television industry including cable television leakage, installation, test and measurement tools to broadband equipment repair and on-site calibration. For more information about ComSonics, visit www.comsonics.com.



April 2009

The following articles appeared in April 2009.

Wednesday, April 01, 2009

Congratulations to the 2009 AACE Award Winner


While the AACE (Annual Awards for Communications Excellence) Awards are primarily an ESOP Association program, we did want to take a minute to congratulate this year’s winners on a job well done.

Category 1-A, Total Communications Program, 100 or fewer employees

Winner: Nobis Engineering Inc.


Runner Up: The Onyx Group


Category 1-B, Total Communications Program, 101 – 500 employees

Winner: Thomson-Shore, Inc.


Runner Up: Materials Transportation Company


Category 1-C, Total Communications Program, 501 – 1,000 employees

Winner: Douglas Machine, Inc.


Runner Up: Entertainment Partners


Category 1-D, Total Communications Program, 1,001 – 5,000 employees

Winner: American Systems Corporation


Runner Up: Hot Dog on a Stick


Category 2, Audio Visual

Winner: Mills James, Inc.


Runner Up: Harrell Remodeling, Inc.


Category 3-A, Printed Materials, 250 or fewer employees

Winner: MidSouth Building Supply, Inc.


Runner Up: Quadna Inc.


Category 3-B, Printed Materials, over 250 employees



Runner Up: The Walman Optical Company


Category 4-A, Educational Materials, Print

Winner: Parametrix, Inc.


Runner Up: Carris Reels


Category 4-B, Education Materials, ESOP Intranet

Winner: Norcal Waste Systems, Inc.


Category 5-A, External ESOP Advertising, Print

Winner: Carl Warren & Company


Runner Up: Cisco-Eagle, Inc.


Category 5-B, External ESOP Advertising – Website

Winner: Hot Dog on a Stick


Runner Up: Carris Reels


Category 6-A, Special Events, Promotions, 1 Outstanding Event,

250 or fewer employees

Winner: Cisco-Eagle, Inc.


Runner Up: The Onyx Group


Category 6-B, Special Events, Promotions, 1 Outstanding Event,

over 250 employees

Winner: Glatfelter Insurance Group


Runner Up: Acadian Ambulance Service, Inc.


Category 7-A, Special Events, Promotions, Series, over 250 employees

Winner: ComSonics, Inc.


Runner Up: MidSouth Building Supply, Inc.


Category 7-B, Special Events, Promotions, Series, over 250 employees

Winner: Forsythe Technology, Inc.


Runner Up: American Systems Corporation


Wednesday, April 15, 2009

The ESOP Association Announces 2009 Silver ESOP Award Winners


The following release was sent out by The ESOP Association this morning.

For Immediate Release: April 15, 2009

For More Information: Amy Gwiazdowski, 202/293-2971, amy@esopassociation.org

The ESOP Association Announces 2009 Silver ESOP Award Winners

April 15, 2009 (Washington, DC) – The ESOP Association has presented 12 corporate members of the Association with a Silver ESOP Award to recognize their work in sustaining their ESOP (employee stock ownership plan) for 25 years or more. This year, the Silver ESOP Awards are being presented to companies that will be celebrating 25 years as an ESOP company in 2009.

This is the second year the Silver ESOP Awards have been presented by the Association.

In 2008, 130 corporate members were presented with the first annual Silver ESOP Awards.

To qualify as a Silver ESOP Company, winning companies had to have an ESOP in place for 25 years or more, from 1983 on.

“It is my pleasure to present these companies with the 2009 Silver ESOP Award for excellence in sustaining their ESOP for 25 years. Congratulations to all,” said J. Michael Keeling, president of The ESOP Association. “In the fall of 2008, 92.4% of ESOP Association members responding to an Economic Performance Survey reported that creating employee ownership through an ESOP was ‘a good business decision that has helped the company.’ In today’s economic conditions, this is an amazing figure but not an unbelievable one. As these Silver ESOP Award winners have clearly shown, sharing wealth with employee owners creates greater economic prosperity and strengthens our free enterprise system. This is the direction we need to move to turn our economy around.”

The list of 2009 Silver ESOP Award Winners:

Alpine Bank, Grand Junction, CO

Bridge Community Bank, Mechanicsville, IA

Capital Fire Protection Co., Columbus, OH

EMA Group, Inc., St. Paul, MN

James M. Pleasants Co., Inc., Greensboro, NC

Kerotest Manufacturing Corp., Pittsburgh, PA

Medler Electric Company, Alma, MI

Midway Ford Truck Center, Inc., Kansas City, IA

SRC Holdings Corp., Springfield, MO

Stylmark, Inc., Minneapolis, MN

Western Building Products, Inc., Milwaukee, WI

YSI, Incorporated, Yellow Springs, OH

All 2009 Silver ESOP Award winners will be honored at The ESOP Association’s Annual Conference in May and highlighted at the 18th Annual Awards Banquet held on the evening of May 5th.

To be named a Silver ESOP Award winner, a company must be a member of The ESOP Association and have an ESOP in place for 25 years or more.

If you would like to view a list of the 2008 Silver ESOP Award winners, please visit the Association’s website at http://www.esopassociation.org/media/media_pressreleases_041408.asp.

The ESOP Association is the national trade association for companies with employee stock ownership plans (ESOPs) and the leading voice in America for employee ownership. The core cause of The ESOP Association is the belief that employee ownership will improve American competitiveness, increase productivity through greater employee participation, and strengthen our free enterprise economy. For more information please visit, www.esopassociation.org.


Wednesday, April 22, 2009

What blogs are you reading?

According to Technorati (www.technorati.com) a website that tracks blogs, there are over 8 million blogs out there and more are being created each day.

We have a few favorites but we wanted to know what you’re reading. Let us know. Drop us a comment with a link to your favorite blogs.

A few on our reading list:

The Wall Street Journal’s Independent Streethttp://blogs.wsj.com/independentstreet/


One-Stop ESOP Bloghttp://www.onestopesopblog.com/

Retirement Plan Bloghttp://www.retirementplanblog.com/

RSM McGladrey ESOP Bloghttp://rsmmcgladrey.typepad.com/esop/

Steve Sheppard’s Bloghttp://stevesheppard.wordpress.com/

(Steve Sheppard meets with community and service organizations on behalf of the Employee Ownership Foundation to share the employee ownership message with business owners around the county.  For more information, click here – http://www.esopassociation.org/pdfs/SheppardBrochure.pdf.)

The Just Third Wayhttp://just3rdway.blogspot.com/

The NCEO’s Employee Ownership Notes – http://www.nceo.org/blogs/employee_ownership_notes/

Tuesday, April 28, 2009

Chrysler and Employee Ownership?

For the first time since the economic challenges hit the world, official Washington is looking to employee ownership in a unique form at Chrysler and GM — employees will have a stake in the company.

This is good news and bad news.

Good news in that it shows a psychological and philosophical acceptance of employee ownership in some form as the desired outcome under certain circumstances.

Bad news in that it is not an ESOP. And, like many of the ownership schemes established in very distressed companies, the outlook is problematic for those companies.

ESOP advocates should not break out the champagne, just yet.

If you would like to read more about the Chrysler and GM deals, click on the links below.


UAW Said to Get 55% Chrysler Ownership, Board Seats

By John Lippert and Mike Ramsey

April 28, 2009


The Wall Street Journal

UAW to Get 55% Stake in Chrysler for Concessions


April 28, 2009


The New York Times

G.M.’s Latest Plan Envisions a Much Smaller Automaker


Published: April 27, 2009




May 2009

The following articles appeared in May 2009.

Tuesday, May 12, 2009

Kelsonian Thoughts

We thought the following might be of some interest to those who think of ESOPs as good public policy.

A recent presentation on the New York cable show Conversations with Harold Hudson Channer featured an interview with Louis Kelso, the father of ESOPs and the philosophical policy known as Kelsonian thought. The title of the show is – “Binary Economics as a Potential Gateway to the Economic Liberation of Humanity and Thus the Whole of the Much Wider Biosphere.” It can be viewed on YouTube here – http://www.youtube.com/watch?v=p5xB1_TL7SU.

More information about the above program can be found on the Conversations with Harold Hudson Channer website here – http://channer.tv/wednesday.htm,%2004-29-09.htm.

J. Michael Keeling, president of The ESOP Association, has also appeared on Conversations for Harold Hudson Channer. For those that are interested, you can view the episode here – http://www.youtube.com/watch?v=0AAyazoCZB4.


Wednesday, May 13, 2009

ESOP Company Named Small Business of the Year by the U.S. Chamber of Commerce

AGM Container Controls located in Tucson, Arizona has been named the Small Business of the Year by the U.S. Chamber of Commerce. AGM Container Controls is a member of The ESOP Association. The company was highlighted by the Arizona Daily Star today as well – http://www.azstarnet.com/business/292662.

A second ESOP company, Meier Architecture located in Kennewick, Washington also a member of the Association, was a Northwest Regional Finalist for the award.

If you would like more information about the awards ceremony follow this link – http://www.chamberpost.com/2009/05/sb-summit-and-the-winner-is.html. More information about the awards can be found here – http://www.uschambersummit.com/sbsummit/award/default.htm.

Congratulations to both AGM Container Controls and Meier Architecture.

This is further public evidence that ESOP companies are leading the way.  As you’ll note, we ran a post in January titled, Employee-Owned Companies Abound on Fortune Magazine’s Top 100 List for 2009, chronicling the number of ESOP companies on the list and another post titled Positive News to Share about several ESOP companies featured on Axiom News. Both posts can be found under the January link on the right side menu.

Thursday, May 14, 2009

An Overview of ESOPs

In June 2008, J. Michael Keeling, president of The ESOP Association and the Association’s affiliated foundation, the Employee Ownership Foundation (the sponsor of this blog), gave a presentation in Granada, Spain to members of Feansal, a Spanish European employee ownership group for Andalusia, Spain. If you would like more information on Feansal, please visit the website at http://www.feansal.es/. Note: the website is in Spanish.

The presentation provides a good explanation of the U.S. ESOP model and we think it might be useful when speaking with members of Congress and employee owners in general. We also get many visitors to this blog that don’t know much about ESOPs and we thought it might be interesting reading for them as well so we are sharing a link to the presentation.

To read, Employee Ownership in the United States: Focus on the ESOP Model, please click here http://www.esopassociation.org/about/about_esop_overview.asp.  It will take you to The ESOP Association’s website.

Thursday, May 21, 2009

View of Employee Ownership from the Hill

The employee ownership community is very excited about new projects and advancements such as: the Rutgers University Employee Ownership fellowships program, the establishment of an Employee Ownership Chair at Rutgers University, and the work of the Aspen Institute’s Center for Business Education Caseplace.org project. In addition, there were no negative ESOP proposals in the Obama Administration’s budget and of late, there have been no hints at Congressional action against ESOPs.

BUT, sometimes, something very small can be a real eye-opener. Roll Call (www.RollCall.com/missionahead), a Washington, DC newspaper that is read by members of Congress and their staffs, recently ran a special section called “The Future of the American Worker.” It featured columns regarding current policy debates and opinions about what the future holds. In none, NONE, of the columns in the section was employee ownership mentioned. There was discussion of worker empowerment, businesses becoming more employee oriented but no word on employee ownership.

It just goes to show that we still have far to go. Yes, there are many great projects focusing on employee ownership in the works and we are proud of what we have accomplished so far, but making in roads with members of Congress, their staffs, and thought leaders of national media, academia, and think tanks is still a challenge this community needs to focus on.

Wednesday, May 27, 2009

Rutgers Awards Fellowships on Shared Capitalism

On May 22, 2009, Rutgers University released the following press release on Shared Capitalism fellowships. We wanted to share the news with the employee ownership community. The press release can be found on the Rutgers University website as well – http://news.rutgers.edu/medrel/news-releases/2009/05/rutgers-awards-fello-20090522.

Rutgers Awards Fellowships on Shared Capitalism

School of Management and Labor Relations brings together top experts

May 22, 2009

NEW BRUNSWICK, N.J. – At a time when policymakers and academics are examining fundamental questions about corporate governance and the shape of American capitalism, Rutgers University’s School of Management and Labor Relations (SMLR) has brought together – for the first time – 11 top experts and up-and-coming scholars of employee ownership, profit sharing and broad-based stock options to learn about the role that shared capitalism plays in corporations and the economy in general.

SMLR’s new, annual fellowship program was established with a major gift from J. Robert Beyster and Mary Ann Beyster of La Jolla, California, with a grant from the Foundation for Enterprise Development.

Dean David Finegold noted that SMLR has some of the world’s leading faculty who study employee ownership and is building on that strength to expand research in the field. “The idea of the interdisciplinary fellowships is to bring together and support scholars in a broad range of fields in the social sciences and humanities, and at a range of academic institutions, to carry out independent research under the mentorship of Rutgers’ experts in the field,” Finegold said.

The fellowship program is coordinated by two Beyster faculty fellows at Rutgers, professors Joseph Blasi and Douglas Kruse. The first cohort of Beyster fellows will work on a wide variety of projects.

  • Edward Carberry, an assistant professor in business-society management at the Rotterdam School of Management and the first Beyster visiting professor, will report on how employee ownership influences the distribution of power and wealth within corporations.
  • Joe Hsueh, a doctoral candidate in systems dynamics at MIT’s Sloan School of Management, will build an educational computer simulation on the dynamic effects of alternative investment strategies, timing of those strategies for a technology start-up, and tradeoffs of decisions related to compensation and ownership. It also will simulate their impact on employee motivation, productivity, risk, product development, revenue growth, wealth creation and distribution.
  • Pierre Kremp, a doctoral candidate in sociology at Princeton University, will probe the diffusion of stock ownership in the United States and its consequences on wealth inequality, including a comparison of employee stock ownership and nonemployee stock ownership.
  • Fidan Ana Kurtukus, an assistant professor of economics at the University of Massachusetts at Amherst, will explore how firms facing different economic conditions use one form of shared capitalism or another to buffer against economic shocks.
  • Blasi, a professor of human resource management at SMLR, is examining the social and economic history of shared capitalism and related government policy in the United States.
  • Kruse, a professor of human resource management at SMLR, is analyzing decades of academic scholarship in shared capitalism.

A second group of Rutgers fellows, supported by a grant from the Employee Ownership Foundation, are:

  • Yuan Jiang, a doctoral candidate in industrial relations and human resources at SMLR, will begin a teaching position at Indiana-Purdue University next year and will consider the relationships among various forms of employee ownership programs and employees’ cooperative behaviors to achieve team and company goals.
  • Nien-Chi Liu, an associate professor and director of the Graduate Institute of Human Resource Management at the National Central University  in Taiwan, will investigate broad-based stock incentives and corporate performance and governance.
  • Paige Ouimet, an assistant professor at the Kenan-Flagler Business School at the University of North Carolina at Chapel Hill, will evaluate how employee ownership programs influence within-firm dynamics among management, labor and shareholders, and how any surplus associated with increased productivity following the adoption of an employee ownership plan is shared among these groups.
  • Ajnesh Prasad, a doctoral candidate in organizational behavior and industrial relations at the Schulich School of Business at York University in Toronto, will delve into the relationship between organizations’ employee ownership plans and their level of engagement with corporate social responsibility.
  • Peter Thompson, an assistant clinical professor at the College of Business Administration at the University of Illinois at Chicago, will perform an innovative laboratory behavioral economics study of employee ownership.

The fellows program complements the creation of the J. Robert Beyster Professorship of Employee Ownership at SMLR, the “world’s first endowed professorship in this field,” according to Finegold.

Contact: Steve Manas

732-932-7084, ext. 612

E-mail: smanas@ur.rutgers.edu



June 2009

The following articles appeared in June 2009.

Wednesday, June 03, 2009

Employee Ownership Foundation and University of Pennsylvania’s Center for Organizational Dynamics Hold 2nd Annual Symposium on Employee Ownership

On May 2, 2009, advocates of employee ownership gathered in Philadelphia at the University of Pennsylvania for the 2nd Annual Roundtable Conversation among Scholars and ESOP Leaders.

The state of research on employee ownership and questions that need to be answered were hot topics this year with Rutgers professors and the pre-eminent researchers in the field, Dr. Joseph Blasi and Dr. Douglas Kruse, asking participants to let them know what sort of data is needed by the employee ownership community so questions can be assembled.

The 2009 symposium was broken up into two sessions: morning – how fit and resilient are ESOP companies in the current economic crisis?; afternoon – given their stability and long-term perspectives, are ESOP companies hotbeds for green management and making the business case for sustainable development?

A paper by John Logue of the Ohio Employee Ownership Center in Kent, Ohio and a professor at Kent State University, along with his colleague, Professor Jacquelyn Yates, presented a paper titled, “Continuity and Change Over 25 Years of Ohio ESOP Companies: Examining the much discussed but little studied mysterious life cycle of employee owned companies.” The intent of the paper was to provide insight into both longitudinal development of ESOP companies and a cross-sectional change in a single ESOP population of Ohio ESOP companies over a 20 year time period.

The paper by Logue and Yates was a jumping off point for the participants that led the discussion on to broader topics such as the survivability of ESOP companies, a question that has yet to be answered in the ESOP community. In fact, the idea that the survival of an ESOP company and the survival of a company are two distinctly different topics that needed to be considered separately was an issue on the table that led to more questions the community and advocates in the room agreed needed to be answered such as – if the ESOP buys the company time before failing, do you still consider it a failure if it did stay in business and keep people employed after it should have folded?   Another key issue for discussion was whether employee representation on a company’s board of directors is a good or bad development.

The afternoon session quickly morphed into a rapid fire discussion on sustainability of ESOP companies and what needs to be done to make the ownership model a sustainable business model in the larger business community. The question about the value of an ESOP company and whether it can weather an economic crisis better than a traditionally organized business was a very engaging topic for those present as well.

“As always, I was very impressed with the level of discussion and outcomes of this symposium,” said J. Michael Keeling, president of the Employee Ownership Foundation. “Yes, we know we need to look deeper with our research and attempt to answer very tough questions about the ESOP model and its sustainability, but the opportunity to brainstorm with these advocates and individuals on the topic was enlightening. I’m looking forward to next year’s discussion and the work we have ahead of us.”

A tentative date for next year’s symposium has been set for April 30 – May 1, 2010. It will again be held at the University of Pennsylvania’s campus in Philadelphia, Pennsylvania.

Tuesday, June 09, 2009

2009 Edmunson Scholarship Award Winners

The Employee Ownership Foundation is proud to announce the 2009 Edmunson Scholarship Winners.

Wayne Violette and Julie Giantonia of BL Companies, Inc., Meriden, CT

Kathy Althoff and Cathy Jordon of CarePro Health Services, Cedar Rapids, IA

Lisa St. John of CHART Rehabilitation of Hawaii, Inc., Honolulu, HI

Kelly Doyle and Lindsay Grace of Hypertherm, Inc., Hanover, NH

Natalya Steinke and Deborah Morelli of MMC Corp, Overland Park, KS

Krys Spare and Barb McMullen of the Monroe Publishing Company, Monroe, MI

Joanne Schwartz and Janelle Hoftiezer of Priority Sign, Inc., Sheboygan, WI

Heather Seid and Nicholas Verna of Social & Scientific Systems, Inc., Silver Spring, MD

Bev Bachmeier and Bob Engkvist of Summers Manufacturing Co., Inc., Maddock, ND

Aaron Lauinger of Ulteig Engineers, Inc., Fargo, ND

The Charles E. Edmunson Scholarship Program, the oldest and most recognized of the Employee Ownership Foundation’s programs, awards scholarships to winning ESOP companies to help defray the cost of sending non-management employee owners to ESOP Association programs and seminars focused on ownership education.

Thursday, June 11, 2009

The ESOP Association is LinkedIn – Are You?

The ESOP Association now has a group on LinkedIn, the social networking website for professionals. Sign in at www.linkedin.com and search groups to find The ESOP Association.  The Association’s company page can be viewed here – http://www.linkedin.com/companies/the-esop-association.

Join the employee ownership conversation.

Tuesday, June 16, 2009

The ESOP Association Adopts New Strategic Plan

At the recent Board of Directors meeting, the Association’s Board adopted a new Strategic Plan. It is being reprinted in full below. If you have any questions about the newly adopted Strategic Plan, please send an email to esop@esopassociation.org.

Strategic Plan


We believe that employee ownership improves American competitiveness…that it increases productivity through greater employee participation in the workplace…that it strengthens our free enterprise economy and creates a broader distribution of wealth…and that it maximizes human potential by enhancing the self-worth, dignity, and well-being of the American people.

Therefore, we envision an America where employee ownership is widely recognized as a catalyst for economic prosperity…where the great majority of employees own stock in the companies where they work…and where employee ownership enables employees to share in the wealth they help create.

And we look for our nation to become for all the world an example of prosperity with justice through employee ownership.


To educate and advocate about employee ownership with emphasis on ESOPs.

Three to Five Year Goals

Government Relations

1. Maintain current Federal laws that encourage the creation and operation of employee stock ownership plans, or ESOPs.

2. Be the major private sector advocate for the enactment of Federal laws that encourage the creation of new ESOPs.

3. Advocate for regulations by Federal agencies that encourage the creation and operation of ESOPs.

4. Motivate leaders and employee owners of ESOP companies at the State and Congressional District level to persuade Federal officials to support current ESOP laws, and to pursue changes in the law that better promotes the creation and operation of ESOPs.


1. Sponsor and implement conferences, seminars, and similar programs at the national level to (i) provide information on developments that affect ESOPs, (ii) further compliance with ESOP laws and regulations, and (iii) encourage ESOP companies to adopt and implement management tactics and policies that maximize the positive impact of broad-based employee ownership through ESOPs.

2. Support a State & Regional Chapter infrastructure to develop and improve Chapter level programs that further the objectives in Goal 1 above.

3. Develop and implement programs of recognition and awards that highlight and disseminate the best practices of Association members that have successfully created high-performance ownership cultures in their ESOP companies.

4. Support a Professional Advisory Committee infrastructure that brings together leading ESOP practitioners to identify and respond to emerging technical and professional challenges and opportunities facing the ESOP community.

5. Disseminate information on trends and practices in the creation and operation of ESOPs via written and web-based publications

6. Provide support for the education, research, and outreach mission of the Employee Ownership Foundation.

Government Relations and Education Combination Goal

1. Provide to media, academia, non-Congressional thought leaders, and the public, information about ESOPs, and employee ownership in order to persuade more Americans and their elected leaders that employee ownership through ESOPs is good national policy that should be expanded.

Thursday, June 18, 2009

Business News Network – June 15, 2009: Employee Ownership a Model for the Future?

On Tuesday, June 15, 2009, Business News Network (BNN), Canada’s only all business specialty channel, spoke to Levi Sampson, president, Harmac Pulp Mill; Dr. Joseph Blasi, professor, School of Management and Labor Relations, Rutgers University; and Michael Keeling, president of The ESOP Association on the benefits of employee ownership.

To view the video, follow this link – http://watch.bnn.ca/headline/june-2009/headline-june-15-2009/#clip183272.

Tuesday, June 23, 2009

Abolish ESOPs?

That’s what a University of Illinois visiting professor would like to do.

In a press release sent out by the University of Illinois at Urbana-Champaign today, visiting professor Sean Anderson states that ESOPs are the biggest threat to retirement savings and should be banned by Congress. To read the full release, follow this link – http://www.eurekalert.org/pub_releases/2009-06/uoia-otm062209.php.

This is unfathomable. The 2008 Economic Performance Survey conducted by the Employee Ownership Foundation found that 92.4% of individuals reported that creating employee ownership through an ESOP was “a good business decision that has helped the company.” In addition, statistics show that a majority of ESOP companies have other retirement plans, such as defined benefit pension plans or 401(k) plans, to supplement their ESOP.

Having employees own directly, or indirectly, stock in the company where they work is a very traditional and honored policy in the U.S.  Research shows that ESOP companies have employee owners that are highly motivated and that the ESOP improved productivity.

Employee-owned companies have been listed in the top 100 companies to work for by Fortune magazine, have been named the Best Small Business of the Year by the U.S. Chamber of Commerce, and have been listed among the Top Small Workplaces.

Only a neophyte in retirement income policy would call ESOPs the greatest threat to retirement savings. Considering half the American workforce has no employer sponsored retirement savings plan at all, then being diversified in nothing is nothing.

To our ESOP companies in Illinois, and across the nation, what do you have to say to this?

Friday, June 26, 2009

Course on Equity Compensation to be Taught at University of California, San Diego

Anthony Mathews, Director of the Beyster Institute at the Rady School of Management, University of California, San Diego, will be teaching the fourth and fifth iterations of an MBA course on employee ownership this summer and fall. The course covers all aspects of equity compensation including employee ownership as we know it. The title of the course – Topics in Corporate Governance: Techniques of Equity Compensation.

This is evidence of the growing awareness of employee ownership in the academic world and the use of equity compensation at companies to benefit employees. A long time ESOP advocate and expert of ESOP operations, Mr. Mathews’s course is the first course on equity compensation to be taught in an MBA program in the  U.S. that includes a review of the ESOP model..

If you would like additional information about the course, send an email to media@esopassociation.org.



July 2009

The following articles appeared in July 2009.

Wednesday, July 01, 2009

Boston Herald Highlights Litecontrol

The Boston Herald today featured a great story on Litecontrol, an ESOP Association member located in Hanson, MA.

The article talks about company leadership as well as the ESOP. You can read the full article here:

Boston Herald

Plans, results light the way for Veda Clark

By Helen Graves / Cover
Wednesday, July 1, 2009


Wednesday, July 08, 2009

Carl Warren & Co. Named One of the Best Companies to Work for by OC Metro Business Magazine

Carl Warren & Co., an employee-owned company located in Placentia, CA and a member of The ESOP Association, was named one of the best companies to work for by OC Metro Business Magazine. The article was featured in the July 1, 2009 issue.

To read the full story, follow this link – http://www.ocmetro.com/t-CoverStory_Best_Companies_to_Work_For_MAIN_PAGE_0709_01to05.aspx.

For the information on Carl Warren & Co., follow this link – http://www.ocmetro.com/t-CoverStory_Best_Companies13CarlWarrenCo0709.aspx.

Congratulations to the employee owners of Carl Warren & Co.!

Friday, July 10, 2009

ESOPs and Weird History?

Often we here at The ESOP Association are puzzled by two things.  One, comments by some that ESOPs have no problems on Capitol Hill because everyone loves ESOPs.  Two, the seemingly never ending criticism of ESOPs based on not so subtle personal degradation of both Dr. Louis Kelso, whose ideas form the basis of leveraged ESOPs, and Senator Russell B. Long, who championed the original ESOP laws, both deceased.  Well, the evidence of the cynicism about the motives of Dr. Kelso, and the leadership and intelligence of Senator Long, who was loved by everyone who knew him for both his gentle leadership style and his common sense approach to helping people, is more than proven in an upcoming article, that frankly is not very lawyerlike, in the prominent American Bar Association’s publication The Tax Lawyer, Vol. 62, No. 2, Winter 2009 issue.  Here is a link to an excerpt of the article that is being touted by the ABA Tax Section: http://www.abanet.org/tax/pubs/ttl/622wn09/4-Stumpff.html.

Bottom line, as noted on this blog too often, it seems that as many wonderful articles about ESOP companies are done in local newspapers that we highlight here, the positive news is offset by writings of law professors, and big city, white shoe lawyers who seem to be living in the 80s, before the evidence became clear that Dr. Kelso was not a flim flam artist, and Senator Long was not a misled country bumpkin. As solid research evidences the vast majority of ESOPs provide wonderful wealth creation for average pay employees, and help create very special, high performing companies.

Wednesday, July 15, 2009

ESOP Association Members Make Trip to Capital Hill During Annual Conference in May

During this year’s 32nd Annual Conference in Washington, DC, ESOP Association members took time out of their schedules to visit Capital Hill and meet with Senators and Representatives to discuss ESOPs and employee ownership.

With the start of the 111th Congress, these visits play a vital role in helping to spread the employee ownership message and to remind Senators and Representatives of the concerns and hopes of our community. Building a foundation of support among members of Congress will help to counter any unfavorable opinions of ESOPs and, if necessary, to defeat negative proposals.

Members of the Wisconsin Chapter met with staff from the offices of both Senators from their state – Senator Herb Kohl (D-WI) and Senator Russ Feingold (D-WI).

In Senator Kohl’s office, the Chapter met with an advisor who deals with issues relating to pension plan benefits. According to a report from the Chapter, the Senator’s office had not given much thought to ESOPs but Chapter members took the opportunity to educate the staff and are hopeful that if any proposals are offered which are negative toward ESOPs, they would be able to win support from the office.

In a meeting with Senator Feingold’s office, the Chapter found the Senator’s tax policy director very knowledgeable about ESOPs and willing to hear from Association members on the impact of any tax policy on ESOPs. The Senator joined the meeting and agreed to listen to concerns and said he would take a close look at laws encouraging ESOPs. The Chapter felt the Senator was open to supporting policy that encourages broad-based ownership and the members plan to stay in touch with the office on ESOP issues.

As Sandra Paavola, of Enterprise Services, Inc. and Vice President of the Wisconsin Chapter, stated: “Overall, we were pleased with the results of the visits; they provided a reminder of how critical it is that we not take the current legislation benefiting ESOPs for granted. We need to constantly remind our representatives in Washington how great employee ownership is for their constituents, keeping this issue on the top of their minds as debate begins about raising new tax revenues. It is up to all of us to advocate the issues that impact the ESOP community, and we must all make a commitment to create opportunities to talk about the benefits of ESOPs to our Senators and Representatives.”

Thank you to Ms. Paavola for sending a report of the Chapter’s activities to the Association.

The individuals who attended either one or both of the Hill visits for the Wisconsin Chapter include: Amerequip Corp: Mike Festge, Betty Bollis; Sentry Equipment: Mike Farrell, Sherri McDermott, Fred Soto, Lynn Drewicz, Rich Wartgow; Scot Forge (Clinton location): Chris Ecklund, Jesse Kuether, Aimee McGillivray, Isamael Salgado; Enterprise Services: Sandy Paavola, Craig Olinger, Scott Miller; ESOP Insourcing: Aaron Juckett; Alpha Investment Consulting: Mickey Maier.

R.E. Kramig & Co. Inc., of Cincinnati, OH also met with their Congressman while in town for the Conference. An email from Andrew J. Kulesza, treasurer and CFO, had this to say about the company’s visit: “Since I was already at the conference, we flew up three ‘Main Street’ employees to meet with the Freshman Democrat Congressman of Ohio’s 1st District, Steve Driehaus (D-OH). We were hoping that this would allow him and his staff to see how beneficial ESOPs are to the base he and the current administration are trying to support.”

If your company or members of your Chapter had the opportunity to make a visit to Capital Hill, please share your experiences and photos – media@esopassociation.org.

If you would like additional information on how to set up a meeting with your member of Congress, please visit The ESOP Association’s website at www.esopassociation.org. Links to the 2009 Summer Advocacy Kit and the Congressional Company Visit Kit are available on the homepage under News.

Tuesday, July 21, 2009

ESOP Association Board of Directors Endorse H.R. 692

At its most recent Board meeting, the Board of Directors of The ESOP Association endorsed H.R. 692 which would amend the Internal Revenue Code of 1986 to exclude from gross income compensation received by employees consisting of qualified distributions of employer stock.

Congressman Dana Rohrabacher (R-CA) introduced H.R. 692 on January 26, 2009. Essentially, the bill would exempt from tax the value of company stock paid directly to an employee if the employee holds the stock for at least 10 years. This proposal would be most suitable for a publicly traded company. As such, H.R. 692 is the first to encourage employee ownership in a publicly traded company since a 2001 law. The 2001 law expanded the federal tax deduction for dividends paid on ESOP stock to permit a deduction for dividends reinvested by the employee back to the plan to acquire more company stock.

The bill was co-sponsored by Congressman Walter B. Jones, Jr. (R-NC) and Congressman Ron Paul (R-TX).

If you would like a copy of the bill, please send an email to media@esopassociation.org.

Wednesday, July 29, 2009

August Recess is Approaching – Time to Setup a Meeting with Your Member of Congress

August means one thing in Washington, DC – summer recess for members of Congress. In August, every member decamps for home and this is a great time to setup meetings and invite your member of Congress to visit your company. There’s no greater way to show a member the power of an ESOP than to have he or she visit your company and see firsthand.

If you would like information on how to setup a meeting, visit The ESOP Association’s website and download a copy of the Congressional Company Visit Kit: Practical Steps for Unparalleled Results – http://www.esopassociation.org/. It is available on the homepage under News.

Having a member of Congress visit your company is one of the most important government relations activities you can undertake. It is that the most effective activity for obtaining support for ESOPs from a member of Congress. The company visit is more effective than a visit in the member of Congress’s home office and certainly more effective than visiting with a member of Congress in Washington DC.

Has member of Congress been to your company? Tell us about the visit.



August 2009

The following articles appeared in August 2009.

Wednesday, August 05, 2009

The ESOP Association’s Advisory Committee on Legislative and Regulatory Issues Submits Comments to Internal Revenue Services Employee Plan Division

The ESOP Association’s Advisory Committee on Legislative and Regulatory Issues submitted comments on June 30, 2009 to the Internal Revenue Services Employee Plan Division.

The comments addressed very technical issues related to the appropriate actions by an ESOP sponsor to comply with all laws and regulations under the enforcement jurisdiction of the Department of Treasury and IRS with regard to tax qualified, deferred compensation plans. If you would like a copy of the comments submitted by the Association, please send an email to media@esopassociation.org.  A copy of the comments can be found on The ESOP Association’s website at – http://www.esopassociation.org/pdfs/L&R_Memo_to_IRS_6-30-2009.pdf.

“I express appreciation for the professionalism and openness of the both the IRS personnel and Treasury personnel to work on enforcing the laws and regulations with regard to the creation and operation of employee ownership through the ESOP model,” said J. Michael Keeling, president of The ESOP Association.

Friday, August 07, 2009

New Pro-ESOP Promotion Proposal Introduced in Senate

We wanted to share with everyone the following email which was sent out by The ESOP Association this morning about new pro-ESOP legislation introduced by Senator Blanche L. Lincoln (D-AR) on August 6, 2009.

Additional information will be available on the Association’s website.

ESOP Legislative Bulletin

New Pro-ESOP Promotion Proposal Introduced in Senate

On August 6, 2009, Senator Blanche L. Lincoln (D-AR) introduced S. 1612, the ESOP Promotion and Improvement Act of 2009. The legislation has four sections, including an entirely new proposal to remove a 35 year bias against ESOP companies by the Small Business Administration.

One, S. 1612 would repeal the punitive 10% penalty tax on S corporations distributions from current earnings, also referred to as dividends, placed on the distributions from current earnings that are passed through to ESOP participants in cash.

Two, S.1612 would clarify that dividends paid by C corporations on ESOP stock are not a preference item in calculating the corporate alternative minimum tax.

Three, S. 1612 improves the 1042 ESOP tax deferred rollover provisions by (a.) permitting sellers to the ESOP of an S corporation to utilize the ESOP tax benefit referred to as the tax deferred rollover, or the so-called 1042 treatment; (b.) permitting proceeds received from a 1042 transaction to be reinvested in mutual funds consisting of operating U.S. corporation securities; and (c.) redefining what is a 25% owner, for purposes of IRC 1042, as a 25% owner or more of voting stock, or 25% owner or more of all stock of the corporation, instead of current law definition that owning of 25% of any class of stock is a 25% owner for purposes of IRC 1042.

And, four, S. 1612 would eliminate a bias against majority owned ESOP companies by making clear that a non-ESOP small businesses currently eligible for any Small Business Administration program is still eligible for the SBA program if becoming a majority owned ESOP company with the same characteristics it had before becoming a majority owned ESOP company. (A majority owned ESOP company is 50% plus owned by the ESOP on behalf of the employees.)

Senator Blanche Lincoln is the senior Senator from Arkansas elected in 1998 and as the fifth ranking majority member of the Senate Committee on Finance, chairs the Social Security, Pensions, and Family Policy Subcommittee.

Senator Mary L. Landrieu (D-LA) is an original co-sponsor. Senator Landrieu is chair of the U.S. Senate Committee on Small Business and Entrepreneurship as an original co-sponsor.

Wednesday, August 12, 2009

Health Care Debate Muddies Water

This article originally ran in the July/August issue of the ESOP Report as the Washington Report. We wanted to share the column with blog readers as we thought it was very timely. 

We also wanted to remind members that now is the time to speak with members of Congress about S. 1612, the ESOP Promotion and Improvement Act of 2009 introduced last week by Senator Blanche L. Lincoln (D-AR).

Two things: First, seldom does one’s issue literally push everything else to the back burner, despite what arm chair “experts” say, as the conventional wisdom is always that headlines on cable TV mean Congress is not doing anything else. The conventional wisdom is wrong 99.999% of the time. For example, the 1974 move by Congress to consider, and then vote on impeaching former President Richard Nixon was deemed by most superficial observers to mean Congress would not be taking action during that tense time on other legislative matters. No true, as ERISA was shaped during the impeachment debates of 1974, and not true today…except there is always an exception to the rule.

The legislative struggle over reforming health care in the U.S., a near two trillion effort, is truly sucking the air out of all the legislative committees of Congress that deal with ESOP laws, leaving uncertain how and when the tax and labor committees would ever turn to issues that would directly impact ESOP companies and ESOP creation.

Second thing to mention—no one knows what is going happen with the big push by President Obama and his allies in Congress to reform U.S. health care systems. To make the point: let’s assume it was legal to put on retainer President Obama, Speaker Nancy Pelosi [D-CA], Chairs of the Congressional tax committees, Senator Max Baucus [D-MT] and Congressman Charles Rangel [D-NY], not to lobby but to give insider information on when a new health reform bill would pass Congress, and what would be in the bill. Assume it was legal to pay each $1 million for this insider information. It would be submitted from this vantage point that whoever paid these people for the information would be disappointed as none of the above know when, and what, will pass Congress, if anything, reforming the U.S. health care system.

The point here is that ESOP advocates should never ever assume that the legislative agenda is known precisely, and therefore a prediction, or declaration of “don’t worry about negative ESOP proposals,” is never ever a smart position for ESOP advocates to take.

There is some good news, however, beyond the admonition to never let one’s guard down in the legislative fighting; this good news is that the House leadership has agreed that when the tax committees work later this year, or early next year, to reform the estate tax, and to do another one year hold at prior year levels for the individual alternative minimum tax trigger, the Ways and Means Committee will not have to “pay for” these two technical tax cuts.

So while the word to the wise is not to believe ever that ESOP law is not subject to a surprise attack by a tax committee looking for revenue, the general cloud on the horizon, as stated since the 2008 election, is the drive to lower the corporate income tax rate by repealing many corporate tax credits, deductions, and deferrals, of which the ESOP tax benefits are included.

Friday, August 14, 2009

Employee Ownership Month 2009 – Get Your Press & Event Planning Kit Today

  What Will YOU Be Doing?

 Every October, for over 20 years, The ESOP Association and its members have been celebrating Employee Ownership Month (EOM). Each summer, the Press & Event Planning Kit, which highlights EOM activities of members, is shared with all corporate members of the Association to help in planning events. To download your copy of the 2009 Press & Event Planning Kit, follow this link – http://www.esopassociation.org/.   A link to the Press Kit can be found on the homepage under News.

Employee Ownership Month is a celebration of the incredible spirit of employee ownership and an opportunity to educate employee owners about the tremendous benefits of ESOPs. It is also an opportunity to educate the public, elected officials, and the media as to why employee ownership through ESOPs is good public policy and this Kit will help you in your endeavors.

Get started TODAY! Download your copy of the 2009 Press & Event Planning Kit.

If you have questions or would like to submit stories about your EOM events, please send an email to media@esopassociation.org.

If you are a member of The ESOP Association and wish to receive a complimentary copy of the winning 2009 Employee Ownership Month Poster, you will need to request a copy from the national office via email – esop@esopassociation.org. In the subject line please add EOM Poster Request. Please include your name, company, and full street address in the body of the email for the poster to be delivered.  If you would like to order additional copies of this year’s poster, follow this link for an order form – http://www.esopassociation.org/pdfs/EOM_Poster_Order_Form_2009.pdf.  A photo of the 2009 Winning EOM Poster by Herff Jones, Inc. of Indianapolis, IN is below.

Monday, August 17, 2009

ESOP Companies Outperform Stock Market in 2008

We wanted to share with readers the following press release which was sent out by the Employee Ownership Foundation this morning regarding the results of the recent Economic Performance Survey.

For Immediate Release: August 17, 2009

For More Information: Amy Gwiazdowski, 202/293-2971, amy@esopassociation.org

ESOP Companies Outperform Stock Market in 2008

In Survey, 88.5% of ESOP Association Members Report Better Performance

Than Stock Market

August 17, 2009 (Washington, DC) – Results from the Employee Ownership Foundation’s 18th Annual ESOP Economic Performance Survey show that 88.5% of ESOP companies outperformed the stock market in 2008. The results indicate respondents’ companies outperformed three major stock indices in 2008 including the Dow Jones Industrial Average, the NASDAQ Composite, and the S&P 500.

As has been the case in all 18 years the survey has been conducted, a very large majority, 88.2% of survey respondents reported that creating employee ownership through an ESOP (employee stock ownership plan) was a “good business decision that has helped the company.” In addition, 65% indicated the ESOP positively affected the overall productivity of the employees. In terms of profitability, the number is down from 2008 with 50.4% of respondents stating profitability increased in 2008. In terms of revenue, 57.9% reported an increase over the prior year. A new question was added to the survey in 2009 asking ESOP companies to report whether profits/revenue were down in the final quarter compared to the first quarter of the year. Approximately 63% reported that profits/revenue were down significantly/moderately, with 12.2% reporting the last quarter remained the same as the first. In addition, 13.3% reported that revenue improved in the last quarter and 10.2% reported that profit improved in the same time frame.

“In a turbulent year, these results speak wonders for the power of employee ownership,” said J. Michael Keeling, president of the Employee Ownership Foundation. “On the other hand, this survey and most news reports show that American companies are hurting, profits are down, and layoffs are taking place across the country. Objective academic research evidences that employee owned companies are higher performing, have high employee retention rates, and have employees that are more motivated and productive. Our national leaders need to promote policies to encourage more companies to become employee owned through an ESOP to create a more fair and equitable society.”

In addition, the survey asked companies to indicate their performance in 2008 relative to 2007:

·        50.9% indicated a better performance; 39.7% indicated a worse performance; 9.4% indicated a nearly identical performance as the previous year

·        57.9% indicated revenue increased; 42.1% indicated revenue did not increase

·        50.4% indicated profitability did increase; 49.6% indicated that profitability did not increase

·        65% of survey respondents indicated the ESOP improved the overall productivity of the company’s employees

·        51.3% of companies that responded indicated they have created an employee participation program since establishing the ESOP

The 2009 Economic Performance Survey was distributed to The ESOP Association’s over 1,400 members in May 2009. The results are based on 429 responses, a 31% response rate.

For additional information about the survey, please visit the Employee Ownership Foundation’s website at www.employeeownershipfoundation.org or The ESOP Association’s website at www.esopassociation.org.

The Employee Ownership Foundation is The ESOP Association’s affiliated 501 (c)(3) organization dedicated to promoting employee ownership.

Founded in 1978, The ESOP Association represents over 1,400 ESOP companies who believe that employee ownership will improve American competitiveness, increase productivity through greater employee participation and strengthen our free enterprise economy.


To view a summary of the finding from 2000 – 2009, follow this link – http://www.esopassociation.org/pdfs/EPS_Summary_2000-2009.pdf.

Thursday, August 20, 2009

Advocating Employee Ownership Through ESOPs – GET ON THE BANDWAGON!

Want to know what you can do to help ESOPs? Download a copy of the Advocacy Kit from the website along with a copy of the Congressional Company Visit Kit and start reading.

The Advocacy Kit provides specific information on issues of interest to The ESOP Association and its members as well as step by step instructions for contacting a member of Congress and what to say. The Congressional Company Visit Kit walks through the reasons for hosting a company visit and how to go about setting one up with a member of Congress.

Both Kits can be found on the Association’s website at www.esopassociation.org. Check for direct links under the News link on the homepage.

Wednesday, August 26, 2009

ComSonics Goes to Washington

Since legislation has been a recent topic here, we thought we would share a few stories from ESOP Association members who have visited with members of Congress. The following article ran in the July/August 2009 issue of the ESOP Report.

ComSonics, Inc. of Harrisonburg, VA sent their usual large delegation this spring to the Annual Conference in Washington, DC. However, they did not simply remain in the confines of the Conference hotel. Instead, they fought the battle of obtaining taxi service and trekked three different times up to Capitol Hill to visit members of Congress.

ComSonics’s main office is located in Harrisonburg, VA, with a manufacturing plant located just 15 miles south, so the bulk of the company’s employee owners are represented in the House of Representatives by Congressman Bob Goodlatte (R-VA-6th). Congressman Goodlatte has been a long time supporter of pro-ESOP legislation, having also represented ESOPs in his legal career prior to venturing into politics. The ComSonics group, joined by some attendees from Gala Industries in Eagle Rock, VA, ventured to the Rayburn House Office Building and visited with Congressman Goodlatte.

The ComSonics group then circled up early the next morning and ventured to the Russell Senate Office Building where they visited the newly minted Senator, Mark Warner (D-VA). Senator Warner was elected to the seat vacated by retiring Senator John Warner (no relation), and they were eager to provide first-hand evidence on why he should support employee ownership.

They then gathered again the following afternoon and trekked once more to the Hill, this time to the Canon House Office Building, where they visited with aides of Congressman Eric Cantor (R-VA-7th) from the Richmond, VA area. Although only a few of ComSonics’s employees live in Congressman Cantor’s district, they wanted to make contact because he sits on the all important House Ways and Means Committee. They were able to discuss the benefits of employee ownership with his staff and will be working with Richmond area ESOPs so they can make further contact with him.

A great deal of thanks goes to ComSonics’s EAC Vice-Chair Markita Madden. Several months prior to the conference, Markita took the reins of this project and made numerous phone calls, sent countless emails, and eventually organized all of the company’s visits.

As ComSonics’s employee owner T. Keith Robertson stated, “I encourage all Association members to find someone in your organization to serve as point person to organize legislative activities. To quote Pericles, ‘Just because you do not take an interest in politics doesn’t mean politics won’t take an interest in you.’”



September 2009

The following articles appeared in September 2009.

Wednesday, September 02, 2009

The Aspen Institute Announces Daphne Berry as Winner of 2009 Dissertation Proposal Award

The following press release was sent out this morning by the Employee Ownership Foundation regarding the winner of the 2009 Dissertation Proposal Award – Daphne Berry. We wanted to share the news with our readers here.


Contact: Linda Lehrer

Communications Director

The Aspen Institute

(212) 895-8002


Wai-Lean Roos

Foundation for Enterprise Development

(858) 754-3559


Amy Gwiazdowski

The ESOP Association/Employee Ownership Foundation

(202) 293-2971


The Aspen Institute Announces Daphne Berry

as Winner of 2009 Dissertation Proposal Award

Collaborative Initiative on Shared Capitalism Through Employee Ownership

New York, NY, September 2, 2009 – The Center for Business Education at the Aspen Institute, in collaboration with the Foundation for Enterprise Development (FED) and the Employee Ownership Foundation (EOF), today announced Daphne Berryas the winner of the newly created 2009 Dissertation Proposal Award. This inaugural award for promising dissertation research in the realm of broad-based employee ownership is intended to identify innovative research and high-impact ideas about business and society focusing specifically on Shared Capitalism through Employee Ownership.

Daphne Berry, a fourth year doctoral student of management at the University of Massachusetts Amherst, is undertaking trailblazing research in the area of direct care workers. Specifically, Berry questions whether home health care aides are more or less productive given the structure of the organization by which they are employed.

“Through the establishment of this award, the partnership between the Center for Business Education at the Aspen Institute, Foundation for Enterprise Development, and the Employee Ownership Foundation continues to expand knowledge of employee ownership among the world’s academic centers,” said Joseph Cabral, chair of the Employee Ownership Foundation.  “We salute Ms. Berry, as well as the two finalists and all who submitted proposals, for joining the ranks of thoughtful researchers on the dynamics of employee ownership.”

“The current economic crisis and its subsequent repercussions on the business world serve as unfortunate reminders of the vulnerability of existing business models,” said Rich Leimsider, director of the Aspen Institute Center for Business Education. This is an exciting opportunity to investigate alternative models of governance, such as employee ownership, that aim to capture the spirit of capitalism at its best—namely, empowering entrepreneurs to include their communities and stakeholders in wealth creation.”

Two finalists also were selected this year: Francesco Bova, now an assistant professor of accounting at the Joseph L. Rotman School of Management at the University of Toronto, and formerly a doctoral student at Yale University, and; Mark Stanford, a doctoral candidate at the University of Oxford, Linacre College.

The winner and finalists of this new award were selected through a multi-round review process. The seven final round judges represented a wide spectrum of high-caliber institutions: Joseph Blasi, Rutgers University; Richard Freeman, Harvard University; Takao Kato, Colgate University; Tom Kochan, Massachusetts Institute of Technology; John Logue, Kent State University; Corey Rosen, executive director, The National Center for Employee Ownership; and Maureen Scully, University of Massachusetts Boston.  Together with the sponsors, the judging panel was interested in creating a recognition program to help promote research and education for subsequent generations of employee ownership scholars.

“This innovative award program will help us identify and support the new bright stars in academia,” said Mary Ann Beyster, FED president. “It is through their research that we can improve the understanding and evidence about how models of employee ownership and participation support economic activity, meaningfulness of business, and quality of life for communities and families.

Daphne Berry will receive an honorarium from the sponsoring organizations, receive research guidance from scholars in her area of study, and be recognized during an awards breakfast at the corporate headquarters of Ernst & Young in New York City on November 6, 2009.

For more information about this award, please visit:


About The Employee Ownership Foundation

The Employee Ownership Foundation supports research, education and public awareness of programs that will increase the level of understanding and appreciation of the benefits of employee ownership and increase the number of employees who have access to this benefit. For more information, visit: www.employeeownershipfoundation.org.

About The Foundation for Enterprise Development

The Foundation for Enterprise Development, established by Dr. J. Robert Beyster, has programs for new research, educational materials, policy development, and knowledge sharing that helps cultivate young and senior scholars and supports future generations of science and technology leaders interested in the combined principles of broad-based, participative employee ownership and entrepreneurialism. For more information, visit: www.fed.org.

About the Aspen Institute Center for Business Education

The Aspen Institute Center for Business Education equips business leaders for the 21st century with a new management paradigm—the vision and knowledge to integrate corporate profitability and social value. As part the Aspen Institute, the Center aims to foster values-based leadership, encouraging individuals to reflect on the ideals and ideas that define a good society, and to provide a neutral and balanced venue for discussing and acting on critical issues.


Wednesday, September 09, 2009

Employee Ownership Month is almost here!

October is right around the corner…what will you be doing for Employee Ownership Month?

If you’re in the process of planning your celebrations, take a minute to download a copy of the 2009 Press & Event Planning Kit. The Kit is now available on the Association’s website at http://www.esopassociation.org/resources/resources_month.asp. It contains examples and ideas for putting together an Employee Ownership Month event or activities.

If you wish to receive a complimentary copy of the winning 2009 Employee Ownership Month Poster, you will need to request a copy from the national office via email – esop@esopassociation.org.  In the subject line please add EOM Poster Request.  Please include your name, company, and full street address in the body of the email. If you would like to order additional copies of the poster or items for Employee Ownership month, click here – http://www.esopassociation.org/esopstore/ or call 202/293-2971.

The 2009 winning Employee Ownership Month Poster by Herff Jones of Indianapolis, IN is below.

Don’t forget to leave a comment about your EOM plans. We just might feature your company’s October events and celebrations on the blog!

Thursday, September 10, 2009

Winning Workplaces Webinar Executive Learning Series

Winning Workplaces is a non-profit organization dedicated to honoring successful small businesses with great work cultures from across the nation.  Each year they manage a national competition with The Wall Street Journal entitled Top Small Workplaces and host monthly webinars featuring these inspiring business leaders who discuss timely business topics. This month they will be featuring King Arthur Flour’s CEO Steve Voigt.

Steve is a former Chair of The ESOP Association and is actively involved with the work of the Association and promoting employee ownership through ESOPs. The King Arthur Flour Company is a member of The ESOP Association.

More information about the webinar is below.

Winning Workplaces Webinar Executive Learning Series

“King Arthur Flour Company: Mixing Tradition with New Inventions”

Featuring CEO, Steve Voigt

Wednesday, September 23, 2009, 10am CST

Founded in 1790 in Boston, King Arthur Flour is the oldest food company in the nation. This company has undergone a major transformation from a small, 12 person operation to a 100% employee-owned company with a workforce of over 200.  In 1999, Steve Voigt was only 41 years of age when he took over the business. The company has steadily flourished, with sales growing an average of 15% annually.  Join us for this webinar to hear how this family-owned firm successfully transformed its business by injecting new life, diversification and innovation.

Sign up before September 18 and receive a 40% discount off the price of the webinar. To receive discount, use code KAF09.   For more information and to register, please go to www.winningworkplaces.org/webinars.

Questions or more information?  Call Diane Stoneman at Winning Workplaces @ (847) 328-2819.

Wednesday, September 16, 2009

Illinois ESOP Association Members Meet with Congressman Danny Davis

We’ve received several reports from ESOP Association members who have met with their member of Congress and we’ll be featuring more of these stories here in the next few weeks. If you host a meeting with your member of Congress, please send us an email and let us know – media@esopassociation.org.

On June 15, 2009, 32 members of the Illinois ESOP community had the opportunity to discuss the value of employee ownership, and specifically ESOPs, with Congressman Danny Davis (D-IL-7th) at an event hosted by SmithBucklin Corporation. Given his recent appointment to the House Ways and Means Committee, the Illinois Chapter made it a priority this year to establish a dialogue with Congressman Davis and his staff. Participating in this event were the following ESOP companies which are located, or who have employees who live in, the Congressman’s district:

Amsted Industries

Campbell & Company

Forsythe Technology

National Bureau of Property Administration

Pioneer Engineering

SmithBucklin Corporation

The collective efforts to share individual ESOP experiences with the Congressman made the event a resounding success. The program opened with a short presentation about ESOPs, followed by a group discussion. Participants had the opportunity to share some background about their organization, its ESOP, and some personal stories with Congressman Davis as to how their ESOP has positively impacted employees, particularly front line workers. Especially noteworthy, were the very moving anecdotes of two participants in the program who told Congressman Davis that as a result of the performance of their ESOP accounts, they were in a position now to allocate enough money from their regular savings to send their children to college.

In his own remarks at the event, Congressman Davis seemed to appreciate what a great tool ESOPs are to generate broad-based ownership of companies. The Illinois Chapter will look to continue building on that appreciation and maintain continuous contact with Congressman Davis and his staff to ensure our community has a new ESOP advocate on Ways and Means.

Thursday, September 17, 2009

Two House Ways and Means Democrats Introduce Pro-S ESOP Bill

The following Legislative Bulletin was sent out this morning by The ESOP Association.

ESOP Legislative Bulletin

Two House Ways and Means Democrats Introduce

Pro-S ESOP Bill

On September 16, 2009 Congressman Ron Kind (D-WI) introduced H.R. 3586, The S Corporation ESOP Promotion and Expansion Act of 2009, to improve and promote S ESOP laws. In general, the bill would: permit owners of S stock to sell their stock to an ESOP under the same treatment C stock of a private company receives under Internal Revenue Code Section 1042, also known as the ESOP cap gains deferred rollover provision; permit a lender to S corporations to exclude 50% of its interest income if the loan is used for a qualified employer securities loan, modeled after former IRC Section 133; permit an S ESOP to assume the estate tax liability of an estate if S stock of equal value is transferred to the S corporation ESOP; and establish a Federal program in the Department of Labor to encourage S ESOP creation. H.R. 3586 was co-sponsored by Congressman Earl Blumenauer (D-OR).

“The ESOP Association will urge Congress to enact this legislation to aid its 1,000 plus S ESOP members nationwide, and to promote the creation of more S ESOPs,” said Association President J. Michael Keeling. “We will continue to encourage enactment of new laws, such as S. 1612 by Senator Blanche Lincoln, to aid our approximately 500 C ESOP members as well our S ESOP members,” he added.

Association members are encouraged to not only watch their email boxes for more updates on legislative developments impacting their ESOPs, but also to urge their Representatives and Senators to be for pro-ESOP legislative and to stand against any proposals negative to ESOPs.

For more information on contacting members of Congress, download a copy of the Association’s Advocacy Kit.

Friday, September 18, 2009

CNNMoney.com Small Business Story – When Workers Take Charge

We wanted to share a link to this story on CNNMoney.com —


When workers take charge

It’s a unique model – the worker-owned business. Some say it sounds like socialism, but these six companies say it’s helped them tough out the recession.  http://tinyurl.com/n2jxns

Featured in the article is the ESOP company Full Sail Brewing Co. located in Hood River, OR. Full Sail Brewing Co. is a member of The ESOP Association. Several other companies featured are co-ops and worker-owner arrangements.

While the headline talks about socialism, we like to think of it as nothing but the apogee of capitalism as individuals are owners.

Tuesday, September 22, 2009

Number of MN/Dakotas Chapter Hill Visits Impressive

We’ve received numerous reports from ESOP Association members who have met with their member of Congress and we’ll be featuring more of these stories here in the next few weeks. If you host a meeting with your member of Congress, please send us an email and let us know – media@esopassociation.org.

Pro athletes are constantly judged by percentages. In baseball, hitting the ball 30% of the time is looked upon as a success. In football, winning half of your games might get you into the playoffs and in hockey and basketball it seems like everyone makes the playoffs. But these athletes can’t shake a stick at the success the MN/Dakotas Chapter recently achieved with their visits to Capitol Hill during the Annual Conference in May.

Chapter members lined up and visited with the offices of 11 of their 15 active members of Congress (At the time of these visits, MN was still trying to decide who their second Senator should be.) for a success rate of 73%. More impressive is the fact that during those 11 visits, 9 of them included the actual member of Congress. Members visited included the following: Senator Tim Johnson (D-SD); Senator John Thune (R-SD); Congresswoman Stephanie Herseth Sandlin (D-SD-at large); Senator Byron Dorgan (D-ND); Senator Kent Conrad (D-ND); Congressman Earl Pomeroy (D-ND-at large); Congressman John Kline (R-MN-2nd); Congressman Erik Paulsen (R-MN-3rd); Congresswoman Betty McCollum (D-MN-4th); Congressman Keith Ellison (D-MN-5th); Congresswoman Michele Bachmann (R-MN-6th).

A big thank you goes out to the members of the Chapter’s Government Relations Committee and the Chapter members who made this all happen. They are now busy lining up visits to ESOP companies when the members of Congress are home in August.

Wednesday, September 23, 2009

Employee Ownership and Business Performance

An article about the recent academic symposium sponsored by the Foundation for Enterprise Development (FED) on employee ownership appeared on the San Diego News Network. Written by Mary Ann Beyster of the FED, it is a nice re-cap of the event. The purpose of the event was to share findings and research on employee ownership and how it motivates employees and improves business practices.

To read the full article —

Management: Employee ownership improves business performance

By Mary Ann Beyster, SDNN


Monday, September 28, 2009

Employee Ownership Month – What are you doing this year?

October is Employee Ownership Month (EOM), the celebration of the incredible spirit of employee ownership. For almost 20 years, the employee ownership community has been celebrating with company picnics, roundtable discussions, and activities to increase team work. It’s an opportunity to educate employee owners about the benefits of ESOPs and a time to educate elected officials and the public as to why employee ownership through ESOPs is good policy.

What will your company be doing this year to celebrate? Drop us a line and let us know how you celebrate EOM.

For more information, visit The ESOP Association’s website.

Monday, September 28, 2009

Two ESOP Association Members Named 2009 Top Small Workplaces

Two members of The ESOP Association have been named among the Top Small Workplaces. Congratulations to Heavy Construction Systems Specialists, Inc. (HCSS) of Houston, TX and Skyline Construction, Inc. of San Francisco, CA.  For more information about the Top Small Workplaces project, visit www.wsj.com/smallbusiness and www.winningworkplaces.com.

The winners were featured in a special small business section of The Wall Street Journal in print and online today. The read the full story, click here.

To qualify for a Top Small Workplace, companies need to employ 500 or fewer individuals, have revenues of $200 million or less, be based in North America, and be an independent company not part of a larger corporation. The winners were chosen based on their success in creating a culture fostering professional growth opportunities, and unique benefits.

Research on employee owned companies has found the ESOP companies are high performing, have high employee retention rates, and workers that are more productive and motivated.



October 2009

The following articles appeared in October 2009.

Thursday, October 01, 2009

ESOP Community Celebrates Employee Ownership Month!

The following press release was sent out by The ESOP Association this morning to kickoff Employee Ownership Month 2009. If your company is planning a special celebration this year, tell us about in the comments.

For Immediate Release: October 1, 2009

For More Information: Amy Gwiazdowski, 202/293-2971, amy@esopassociation.org

ESOP Community Celebrates Employee Ownership Month!

Washington, DC (October 1, 2009) – This October, The ESOP Association and the employee ownership community will celebrate Employee Ownership Month, which is a tribute to the incredible spirit of employee ownership.

Employee Ownership Month is an opportunity for ESOP (employee stock ownership plan) companies across the U.S. to educate employee owners and the public about the tremendous benefits of ESOPs. Companies celebrate with picnics for employee owners, roundtable discussions with local public officials, and award ceremonies to honor outstanding employee owners.

“The recent Economic Performance Survey by the Employee Ownership Foundation shows that 88.2% of companies believe that ESOPs are good for business,” said J. Michael Keeling, president of The ESOP Association. “In these challenging times, that is saying a lot about employee ownership. Of course, these numbers prove what we in the ESOP community have been saying every October for about 20 years, and once again, I’m proud of our members and the work they do to promote employee ownership.”

Employee Ownership Facts:

  • There are approximately 11,000 ESOPs in place in the U.S., covering 10 million employees.
  • Total assets owned by U.S. ESOPs are estimated to be $800 billion.
  • The Economic Performance Survey conducted by the Employee Ownership Foundation earlier this year found:
  • 50.9% of survey respondents indicated a better performance than the previous year
  • 65% indicated the ESOP improved the overall productivity of the company’s employees
  • 88.5% of ESOP companies that responded to the 18th Annual Economic Performance Survey outperformed the stock market in 2008

For more information on ESOPs and Employee Ownership Month, please visit The ESOP Association’s website at www.esopassociation.org.

Founded in 1978, The ESOP Association represents over 1,400 ESOP companies who believe that employee ownership will improve American competitiveness, increase productivity through greater employee participation and strengthen our free enterprise economy.


Wednesday, October 07, 2009

U.S. Congressman Erik Paulsen and Toll Company Re-Visit Employee Ownership and ESOPs

Toll Company, located in Plymouth, MN, met with U.S. Congressman Erik Paulsen in a dialogue on employee ownership and ESOPs on Aug. 5, 2009, at the company’s headquarters.

“We were delighted to discuss with Congressman Paulsen our ESOP story and the incredible impact it has had on our company, particularly its benefits during a weak economy,” said Jim Quicksell, president of Toll Company. “Without the ESOP, we would not exist, and would not be able to share the success of our company with the people who are the company and help make it successful.”

Paulsen and Toll Company employee owners discussed the importance of employee ownership through ESOPs. Toll Company stressed its employee ownership history, and how the ESOP affects the way of life at the company.

More than 40 people participated in the meeting. Congressman Paulsen represents Minnesota’s third district in the U.S. House of Representatives.  The photo below is Congressman Paulsen (left) touring Toll Company with employee owners.


Thursday, October 08, 2009

Fortune Magazine’s 8 Great Companies to Retire From

Fortune Magazine profiled 8 companies that, in the midst of the downturn, are still offering more in terms of retirement than other companies. Among the companies on the list, 25% are members of The ESOP Association — The Procter & Gamble Company and The Sherwin-Williams Company. In addition to the benefits these companies offer, they also have an ESOP as a significant benefit.

To read the full story, click here.

Wednesday, October 14, 2009

Employee Ownership Blog #1 Visited Page on Association’s Website

We are happy to report the Employee Ownership Blog is the number one visited page on the Association’s website. It has lived up to its promise of being the go to place for members looking for up to the minute news and discussion on ESOPs and employee ownership.

The Employee Ownership Blog is open to all members of the ESOP community who would like to share information, articles, and thoughts about ESOPs, employee ownership, retirement and wealth issues, and the ownership society.

If you have something to share, please send an email to media@esopassociation.org. We will try to include as many posts as possible.

And, finally, THANKS!

Thursday, October 15, 2009

Economic Theories and a Pause for Thought

The Nobel Prize for Economics was recently awarded to two U.S. scholars — Dr. Elinor Ostrom of Indiana University, Bloomington, and Dr. Oliver E. Williamson, University of California, Berkeley.

No, neither of these professors have done research on employee ownership but what we found interesting in reading about their work, in particular Ostrom’s work, is the idea of a common or shared ownership.

Ostrom’s work focuses on the commons which is essentially a study of how a group of users manage common/shared property. Her work mainly focuses on natural resources such as lakes and forests and her research has found that common property is often well managed by the people who use it and that in some instances people were willing to punish cheaters even when there was no gain to protect common property. Needless to say, it got us thinking about the concept of employee ownership and shared ownership.

One way to think about employee ownership is that it’s connected ownership. Ostrom’s theory is that common ownership can result in a better human run structure than having a regulated enterprise and when one thinks about an ESOP company you can make a very interesting comparison. In an ESOP company, there is shared ownership — employee owners have an opportunity to help the company run more efficiently and are rewarded when the company succeeds. They have reasons for wanting the company to succeed and are part of the larger structure. They are connected by a common goal of helping the company to help themselves creating an ongoing idea of common ownership that is beneficial to all to protect the common interest.

It’s a noteworthy theory and we do hope this pioneering work will help encourage research in the employee ownership field.

Wednesday, October 21, 2009

Influential Tax Journal Features Respected ERISA Expert Saying “Kill ESOPs”

Andrew Stumpff, an employee benefits law professor at the University of Michigan Law School and the University of Alabama Law School, along with Norman Stein, a Douglas Arant Professor of Law at the University of Alabama Law School, have recently written a piece for Tax Notes’s Shelf Project entitled – “Repeal Tax Incentives for ESOPs.” The article appears in the October 19, 2009 issue of Tax Notes. Professor Stein is a sought after advisor to the Congress on retirement savings policy, and is highly respected by staff policy makers in the Administration and the key Congressional tax committees.

Tax Notes’s Shelf Project is a collaboration among tax professionals to develop proposals to help Congress raise revenue without raising tax rates.

While a close read of the article reveals more of a dislike, or debunking if you will, of the economic theories of ESOP originator Louis O. Kelso, its bottom line is ESOPs do not improve company performance, do not increase wealth consistently, and therefore do not deserve to be ERISA plans nor have tax benefits.

According to their particular proposal, all qualified retirement plan would have to be well-diversified investments. Meaning that ESOPs would and should be subject to diversification rules and all ESOPs tax incentives should be repealed because as the authors state, “ESOPs represent bad public retirement policy…”

They provide four reasons for changing the tax policy to repeal ESOP tax incentives: (1.) ESOPs are not necessary to, and do not, increase workers’ wealth; (2.) Stock ownership does not improve worker productivity; (3.) The pain of underdiversification; and (4.) No reason to subsidize ESOPs.

None of the arguments are new. We’ve heard them all and sometimes, even more interesting ones. But we thought we’d take a deeper look into the reasons cited and provide our own analysis.

The idea that ESOPs do not increase the wealth of workers. The authors state that even workers without large amounts of capital are still able to make a living by working. But what about retirement?  “Wow, I wish I could work until the day I die,” is not a statement one hears often or ever for that matter. Almost everyone tries to plan for retirement and ESOPs allow individuals that do not have access to large amounts of cash to invest in something that can help him/her prepare for retirement.   The average account balance among ESOP Association members is $64,652.06 which is on par with the average 401(k) account average in the U.S. In addition, ESOP Association members report the average contribution the company makes to the ESOP each year, as a percentage of covered compensation, is 13% which is much higher than the 2 – 4% average one finds with 401(k) plans.

The idea that stock ownership does not increase worker productivity.  We’re going to cite research and let is speak for itself.

  • In a 2007 paper titled, “Effects of ESOP Adoption and Employee Ownership: Thirty Years of Research and Experience,” Dr. Steven F. Freeman, Affiliated Faculty and Visiting Scholar in the Center for Organizational Dynamics, Graduate Division, School of Arts and Sciences at the University of Pennsylvania, confirms what the Association has been saying for years, that employee-owned companies experience increased productivity, profitability, and longevity.
  • The most comprehensive and significant study to date of ESOP performance in closely held companies was conducted by Dr. Joseph R. Blasi and Dr. Douglas L. Kruse, professors at the School of Management and Labor Relations at Rutgers University, and funded in part by the Employee Ownership Foundation.  The study, which paired 1,100 ESOP companies with 1,100 comparable non-ESOP companies and followed the businesses for over a decade, reported overwhelmingly positive and remarkable results indicating that ESOPs appear to increase sales, employment, and sales/employee by about 2.3% to 2.4% over what would have been anticipated, absent an ESOP.
  • According to the 2009 Economic Performance Survey conducted by the Employee Ownership Foundation, 65% of survey respondents reported that productivity and motivation increased as a result of the ESOP.
  • In 1995, Douglas Kruse of Rutgers University examined several different studies between ESOPs and productivity growth.  Kruse found through an analysis of all studies that “positive and significant coefficients [are found] much more often than would be expected if there were no true relation between ESOPs and productivity.”  Kruse concludes that “the average estimated productivity difference between ESOP and non-ESOP firms is 5.3%, while the average estimated pre/post-adoption difference is 4.4% and the post-adoption growth rate is 0.6% higher in ESOP firms.  Kruse cites two studies as part of his research: Kumbhakar and Dunbar’s 1993 study of 123 public firms and Mitchell’s 1990 study of 495 U.S. business units in public firms.  Both reports found significant positive effects of greater productivity and profitability in the first few years after a company adopted an ESOP.

The idea that underdiversification causes pain. The authors state that “ESOPs are a terrible idea because they concentrate employees’ retirement finds in a single investment.” ESOP advocates respond that the worship of diversity is somewhat misplaced when applied to those of little wealth. Diversification arose in English common law as a policy for someone of wealth, or for a beneficiary of a wealth trust. To diversify a little bit make no sense for someone who has no wealth. All great wealth is created by someone focusing his/her attention on one economic activity. Mellon, Carnegie, Rockefeller, etc. did not become wealthy by putting $1,000 in steel, $1,000 in autos, $1,000 in oil, $1,000 in lumber, etc. In any event, the 1986 tax law mandated diversifying ESOP accounts up to 50% for those nearing retirement at age 55 and 10 years of service. Furthermore, evidence is overwhelming that ESOP companies are more likely to provide retirement plans, such as diversified 401(k) plans than non-ESOP companies. It must be remembered that 50% or so of American workers have no retirement plans where they work so the argument that underdiversifaction causes pain is truly a moot point.

Finally, the idea that ESOPs should not subsidized. The criticism arises from a view that the income tax system should be “neutral,” with no special rules to encourage an activity. These special rules, either tax exclusions, credits, deductions, or deferrals, are known as “tax expenditures.” The theory is that only a minority of taxpayers, or citizens, benefit from a tax expenditure while other taxpayers subsidize the few with high tax rates. It is estimated that the special tax rules for ESOPs amount to approximately a $1.7 to $2.0 billion tax expenditure for ESOPs annually. So the argument goes, ESOP tax expenditures benefit 11 million individual taxpayers out of approximately 200 million tax payers, and 12,000 corporations out of 4 million. At this level of effort, ESOPs are approximately the 149th largest Federal tax expenditure among approximately 165. (The precise numbers are not available because Congress and the Executive Branch have always disagreed over revenue estimates and definitions involving tax expenditures.) The amount is approximately less than .0005% of the national $15 trillion economy. The amount is approximately sixty one-hundredths of 1% of the annual Federal budget in the next fiscal year. To say elimination of ESOPs will lower taxes for tax payers not participating in an ESOP and for businesses without ESOPs for liability because they no longer subsidize the ESOP community, is actually a ridiculous proposition.

There is much more that we can discuss but we’ve covered the major points here.


Monday, October 26, 2009

House Concurrent Resolution Expressing Continued Support for ESOPs Introduced

The following Legislative Bulletin was sent to all ESOP Association members this morning.

ESOP Legislative Bulletin

Congressman Hinchey Introduces House Concurrent Resolution Expressing Continued Support for ESOPs

On October 22, 2009, Congressman Maurice Hinchey (D-NY-22) introduced House Concurrent Resolution 204 which expresses continued support for employee stock ownership plans.

H. Con. Res. 204 cites the Congressional history of ESOPs, references the 35 years of data evidencing that the vast majority of ESOP companies are high performing companies, with better benefits than non-employee owned companies. It concludes that Congress expresses its continued support for ESOPs.

To view additional information or read the text of H. Con. Res. 204, please visit the Library of Congress’s THOMAS page, http://thomas.loc.gov/. On this page, type H. Con. Res. 204 in the search bill summary and status box, click on bill number search below the box, and hit search.

“A commitment by Congress to a fair and more equitable form of ownership is important in the 21st century.  On behalf of the nearly 2,500 members of The ESOP Association, I urge all members of Congress to co-sponsor this resolution,” said J. Michael Keeling, president of The ESOP Association.  “Research has consistently shown that employee owned companies are high performing, have better sales, and provide more retirement savings compared to their non-ESOP counterparts. To have Congress express its continued support for ESOPs is important in the current economic climate.”

Six members of the U.S. House of Representatives co-sponsored the resolution:

Congressman Eric Cantor (R-VA-7)

Congressman Howard Coble (R-NC-6)

Congressman Walter B. Jones, Jr. (R-NC-3)

Congressman Dana Rohrabacher (R-CA-46)

Congressman Edward R. Royce (R-CA-40)

Congressman Mark E. Souder (R-IN-3)

If you have questions about how to contact your member of Congress about co-sponsoring this Resolution, please visit, http://www.esopassociation.org/, and download a copy of the Advocacy Kit, http://www.esopassociation.org/pdfs/Advocacy_Kit.pdf, and a copy of the Congressional Company Visit Kit, http://www.esopassociation.org/pdfs/Congressional_Visit_Kit.pdf, for more information.

If you have any questions about the Resolution, please send an email to govrel@esopassociation.org.



November 2009

The following articles appeared in November 2009.

Monday, November 02, 2009

President of US Steelworkers Criticizes ESOPs

One of the major criticisms of ESOPs we have run into over the years is that ESOPs do not make employees “real” owners, or that ESOPs are not “real ownership.”  Generally, those making this criticism would be labeled as more “liberal.”  [Certain views in conservative circles use different points to criticize ESOPs.]

The President of United Steelworkers International, a very influential labor union in our national politics, Mr. Leo W. Gerard, said in a press release earlier this week:

“We have lots of experience with ESOPs, but have found that it doesn’t take long for the Wall Street types to push workers aside and take back control.  We see Mondragon’s cooperative model with ‘one work, one vote’ ownership as a means to re-empower workers and make business accountable to Main Street instead of Wall Street.”

[The quote stems from the announcement of collaboration with the Basque Region’s MONDRAGON, which is the world’s largest worker-owned cooperative.]

We share because this because it is the most clear cut statement from the “not real ownership” viewpoint we have read in print.

If you wish to read the entire press release go to http://www.usw.org/media_center/releases_advisories?id=0234


Friday, November 06, 2009

Employee Ownership Foundation Supports Louis O. Kelso Fellowships

The Louis O. Kelso Fellowships for the study of broadened ownership of capital in a democratic society will be awarded through Rutgers University for the 2010-2011 academic year to outstanding scholars studying the topic of broadened ownership. The general theme of the fellowships includes the study of the idea, practice, and public policy of broadened ownership of capital assets in society.

The fellowships would permit the scholars to conduct their own work and also associate with several faculty members at Rutgers engaged in this area of research and receive mentoring and support. Ph.D. candidates, post-doctoral scholars, or visiting professors in the areas of business/economics/labor studies/management, history, law, philosophy, political science, psychology, public policy, or sociology may apply.

“Here is another example that the Association’s 501(c)(3) affiliate, the Employee Ownership Foundation, is becoming the number one driver in maintaining and expanding the vision of Dr. Kelso, the father of employee ownership through ESOPs,” said J. Michael Keeling, president of The ESOP Association and the Employee Ownership Foundation.

For additional information about the fellowships, please visit http://www.smlr.rutgers.edu/KelsoFellowships.pdf. For more information and/or questions please email kelso_fellowships@smlr.rutgers.edu.


Wednesday, November 18, 2009

Employee Ownership Foundation Raises Close to $50,000 at 18th Annual Las Vegas Conference and Trade Show

At The ESOP Association’s Las Vegas Conference and Trade Show held November 12 and 13 at Caesar’s Palace in Las Vegas, NV, the Employee Ownership Foundation raised close to $50,000 with the generous help and support of the employee ownership community.

“For two years in a row, the Employee Ownership Foundation has asked members of the Association to help meet a fundraising goal at the annual Las Vegas Conference and Trade Show. For the second year, our members have donated generously to the Foundation and we cannot thank them enough for their support of employee ownership in America,” said J. Michael Keeling, president of the Employee Ownership Foundation.

We’ll be adding additional information and photos from the conference so check back soon.

Thursday, November 19, 2009

Blog Housekeeping

1 – An interesting article on ESOPs ran in The Wall Street Journal this week — “Giving Employees a Share” by Diana Ransom. You can read the full article by clicking on the following link – http://tinyurl.com/ygsa3d5.

2 – The ESOP Association has a page on Facebook. Yep, you heard that right, we’re now on Facebook. So, do what you do and friend us.

3 – Don’t forget we’re on LinkedIn too.

Monday, November 30, 2009

Not All Gloom and Doom

Following is an abbreviated version of remarks delivered by The ESOP Association’s President and Chief Staff Officer, J. Michael Keeling, to attendees of the 18th Annual Las Vegas Conference and Trade Show held at Caesar’s Palace in Las Vegas, NV, November 12 and 13, 2009. The speech originally ran in the November 2009 issue of the ESOP Report.

 “Today’s remarks are in two parts. As I travel around the country speaking primarily to our Chapter meetings, many accuse me of being the “doom and gloom” guy. Many claim I paint a doom and gloom version of events in DC potentially impacting ESOPs because I am trying to scare people to be members of the Association, or to maintain their membership. Less cynical are those who feel I am just sounding the alarm to ensure ESOP advocates stay on their toes when it comes to selling the ESOP message to members of Congress.

So here is the doom and gloom:

Last year in my remarks to Vegas attendees, I praised the historical importance of the election of a man as the number one leader in our nation who just 50 years ago could not eat, sleep, or ride public transportation except as a second class citizen in 20 or so states in our nation.

I also said, without hesitation that day that there are no ESOP fans in his inner circle of advisors, and their view of employee ownership through ESOPs seemed to be shaped by United, Enron, WorldCom, Bear Sterns, Fannie Mae, and so on. And while ESOP fans like to holler that not all of the negative stories arising from the collapse of these companies and their stock value involved ESOPs, in some form or fashion, company stock ownership, direct or indirect, was broad-based in these companies.

One year later, I have not changed my view of the key persons in this Administration.

But my doom and gloom has a caveat — ERISA policy, of which ESOPs are a part, is not front and center at the highest levels of our government. I feel comfortable in stating that in my years of working around the developing of public policy, the number of times that ERISA policy was seriously discussed in the Oval Office of the White House can be counted on my fingers and toes.

But at the level of policy development of retirement savings policy, among third, fourth level, and among career employees of the Federal agencies overseeing ERISA law — IRS, DOL, Treasury, Joint Committee of Congress, tax committee staff, labor committee staff — I call these people not bureaucrats, but ERISAcrats — there is ample evidence that they believe and are trying to promote policies to drastically reform defined contribution plans.

Having read their writings, and having heard them speak, candidly they use the scare tactic that unless major changes are made in Federal ERISA laws, in a few years literally millions of Americans over 65 will be living in poverty, on the streets, on the public dole, hungry, and so on.

The ERISAcrats talk of the wonderful 50s and 60s, and are joined by mainstream media pundits when retired American’s had the “Life of Riley” or “Father Knows Best” lifestyle images with white picket fences surrounding their homes, because they were all retired with a steady stream of income from defined benefit plans.

Of course this picture of retirees in the 50s, 60s, and even the 70s and 80s is just false — at no time did a majority of Americans ever participate in any kind of retirement savings plan sponsored by their employers, whether db or dc.

But be that as it may, the scare tactics, and the twisting of historical data — sadly seemingly used by both left and right political advocates in this day and age of 24-7 news, twitter, facebook, blogs, etc. — has lead to the ERISAcrats putting forth, with supporters among a handful of members of Congress, ideas to make dc plans more like db plans.

For example, using the Federal employee Thrift Savings Plan as a model, there would be a government group that decides what investments an employee and employer could put their savings in; there would be mandatory employer contributions; and mandatory purchasing of annuities with distributions.

Let me assure you, among these recommendations, at worse is the view that no company stock ever be in the “reformed” dc plans, and at best, company stock be limited to 5 to 10% of the assets in an individual account.

But as noted, ERISAcrats — given the low priority retirement savings have when our nation faces two wars, constant threat of terrorists attacks, a sick economy, bitterness over certain social policies, to name a few of the daily headlines — seldom succeed in having their “dreams” become law.

An analogy can be made to the health care debate, as the true desire of the more “liberal” members of society is for a single payer system, and this view ran into a firestorm of effective protest and it is not even being considered by Congress.

But like in the health care debate, the push for change by the ERISAcrats will have some impact on the development of tax policy, and most likely, the lesser areas of ERISA will be endangered — for example, look for 401(k)s to withstand the attack against them since so many k plans cover so many workers — but look for the attack on company stock as a retirement savings asset to have more potential impact since there are not that many ESOPs in our nation.

And the opportunities for the ERISAcrats to reach their desire to stop, or at least, curtail the use of employee stock ownership for retirement savings will be plentiful in the next one to five years, or even beyond.

As I have said in the newsletter, on the blog, and elsewhere, every chance that I get, we are about to see a repeat of the 80s as far as tax policy is concerned.

[Here, Keeling talked of the similarities between the goal to lower the Federal deficit after the 1981 tax cut bill, and the 2009 large spending increases, as in the 80s, when both Republicans and Democrats dedicated their work to raise Federal revenue to lower the Federal deficit.]

So what happened? After the largest tax cut bill in the history of the nation in 1981, within one year, the Congress passed and President Reagan signed the largest peace time tax increase bill in 1982. And there were tax increase bills in 1984, 1986, 1987, 1989, 1991, and 1993 before the tax increases let up.

These bills did not raise tax rates, but instead raised taxes by eliminating, or restricting so-called corporate tax loophole, both corporate and individuals. And what do the ERISAcrats think of ESOP tax benefits that spread the ownership of assets among employees? They view ESOPs as wasteful and not needed, and even “evil” corporate and individual corporate tax loopholes that promote bad retirement savings policy.

In the 80s, with each tax bill, the ERISAcrats put on the table the ESOP tax benefits for elimination, or cutbacks.

Now, I give you the second part of my remarks—which are not gloom and doom.

The ESOP community is stronger today than it was in 1980.

Despite the economy, the Association, and allied organizations that did not exist in the 80s are bigger, with more resources, more key friends in Congress, and with a more entrenched grassroots network promoting employee ownership through ESOPs with members of Congress.

[Here in the remarks Keeling reviewed pending pro-ESOP legislation, and the influence supporters of the pro-ESOP legislation had in Congress. Details about the legislation can be followed in prior newsletters, e-bulletins, and on the Association’s website under the Government Affairs link at the top of the page.]

Key to winning is exposure of your ESOP company in your community. While the Employee Ownership Foundation is making inroads in spreading pro-ESOP facts in academia, and among the nation’s think tanks, what is visible in an ESOP company makes the biggest impression on a member of Congress.

Let me close by sharing a story, first hand, of the power of someone seeing the intangible, and yes it is intangible, power of shared ownership among employees, top to bottom, in a corporation.

As many of you know, the primary ESOP laws exists because of one man, former Senator Russell Long, from 1973 until he retired at the end of 1986. During some of that period, when ERISA was enacted, I worked for a senior member of the House Ways and Means Committee, the former Congressman J.J. Jake Pickle, who like Senator Long, is deceased.

In that era, no one in the House cared about ESOPs. It was viewed as just some sort of weird tax flim-flam by minor lawyers and deal makers to get money out of a private company, and to give public companies a cheap way to tell employees that they had retirement savings.

What a House member did care about was that when there was a so-called Conference Committee to work out the differences between a House tax bill, and a Senate tax bill, he or she could horse trade with Senator Long over an ESOP provision in return for his support to be for that House member’s pet tax law proposed changes.

One day I was in Congressman Pickle’s office during a tax conference period, and he was in what proved to be his toughest re-election campaign that year, 1980. So he was going around to companies shaking hands each week to gain voter support. Out of the blue he said, “I was at [he named a company in Austin, Texas] this past Friday, and they had that thing that Russell talks about all the time, that, that, what do you call it? [I said ESOP]. Yea, an ESOP — I had never been in a company with the same kind of feel to it, the same kind of attitudes towards the CEO and leadership as I walked around. It was special, very special.   Russell must be right; he must be onto something with his ESOPs.”

From that day forward, Congressman Pickle was one of the ESOP world’s best friends in Congress until he retired in 1995.

So, our fate is in our hands, to not hide our wonderful ESOP story as a light under a bushel. If we expose our companies, on site, we will maintain ESOP policy and defeat any attack, and hopefully expand over the long run, our pro-ESOP laws.

I thank you for your attention.”



December 2009

The following articles appeared in December 2009.

Tuesday, December 01, 2009

ESOPs and Retirement Policy Debate

The following letter to the editor was sent to Tax Notes by Corey Rosen, the Executive Director of the National Center for Employee Ownership in Oakland, CA. The letter appeared in a November issue of Tax Notes. Corey shared the letter with us and we are featuring it here on the blog.

 The letter was in response to an article which appeared in the October 19, 2009 issue of Tax Notes titled, “Repeal Tax Incentives for ESOPs” by Andrew Stumpff and Norman Stein.  The Employee Ownership Blog commented on the article as well – Influential Tax Journal Features Respected ERISA Expert Saying “Kill ESOPs.”

We thank Corey for his well-timed challenge to this attack on ESOPs as these “ERISA” experts should not go unchallenged.  The letter follows.

  Yes, ESOPs Really Are Good Retirement Policy

In their recent article in Tax Notes “Repeal Tax Incentives for ESOPs,” Andrew Stumpff and Norman Stein argue that ESOPs do not improve employee wealth or corporate performance, encourage excessively undiversified retirement assets, and should be eliminated. They base this on an incomplete and highly selective look at the data. In fact, researchers “outside the ESOP community” (to use their words) have concluded quite the opposite.

For instance, the most comprehensive study of the effect of ESOPs on wealth was done in 1998 by Peter Kardas and Jim Keogh of the Washington Department of Community, Trade, and Economic Development, and Adria Scharf of the University of Washington. In Wealth and Income Consequences of Ownership, they used 1995 state data and a survey to match 102 ESOP companies with 499 comparison companies. The study found the average value of all retirement benefits in ESOP companies was equal to $32,213, of which $7,952 was outside the ESOP. The average value of retirement assets in the comparison companies was $12,735.[1]

Douglas Kruse and Joseph Blasi at Rutgers have shown that that ESOP companies are much more likely to have secondary retirement plans than non-ESOP companies were to have any kind of retirement plan.[2] So ESOPs are primarily an add-on benefit. In the mythical world the Mssrs. Stumpf and Stein posit, absent tax incentives for ESOPs, companies presumably would put the same amounts into 401(k) plans. A quick look at the current 401(k) landscape dispels this notion.

We are now completing an analysis of Department of Labor Form 5500 filings that reconfirms the Blasi and Kruse findings, showing that companies with ESOPs are more likely to have secondary retirement plan than other companies are to have any plan at all. The data also confirm the Washington State data that overall retirement assets for ESOP participants are about three times those of employees in non-ESOP companies.

According to the Employee Benefits Research Institute (EBRI), just less than half the work force is even eligible for any kind of retirement plan.[3] Companies that do have retirement plans generally contribute only about 3% to 4% of pay per year to the plans, and that money disproportionately goes to more highly paid workers because it is in the form of a match based on employee deferrals. Moreover, many lower paid employees do not defer anything and thus are left out altogether. In ESOPs, by contrast, all employees meeting the basic eligibility requirements (the same as those for 401(k) plans) get contributions of the same percentage of pay or, in some companies, contributions even more tilted to lower-paid employees. Typical ESOP contribution rates are about 6% of pay per year, based on Form 5500 data, and companies usually make contributions to their other retirement plans as well. So yes, the employees are less diversified in their ESOP accounts, but 56% of the work force is not actively in any kind of retirement plan. Even in the uncommon case that the ESOP is the only retirement plan and never becomes at all diversified (most do over time, at least somewhat) that beats being 100% diversified in nothing.

Dallas Salisbury, head of the Employee Benefit Research Institute, the most credible source of retirement plan data in the U.S., had this to say about this issue on an NCEO blog in 2008:

“[Companies] that use an ESOP alone might choose to do nothing if the ESOP was not available as a voluntary option, and those workers would be worse off as a result.

“Labor economics argues that all that ESOP money would be paid as added wages if it did not go for the ESOP, but most employers say that is seldom true. And, even if true over the very long term in the aggregate, it is not true on an individual by individual basis. Thus, many workers are getting ESOP savings that would get nothing above the current wage level were the ESOP not to exist.

“The investment diversification issue misses this added value in place of nothing added (in) reality. Being a voluntary system, even a worthy objective like investment diversification should not be allowed to result in no savings for the worker. The rules must be balanced with the facts of voluntarism and added value.”

The reasons ESOP companies are more generous is threefold. First, ESOPs are typically used to buy out an owner of a profitable closely held company. Companies need to make substantial contributions to the ESOP to make this possible. Most already had existing retirement plans in place, and are reluctant to get rid of them. Second, ESOP companies are often led by people who take a more pro-employee view of work. Finally, ESOP companies are in fact more successful.

Corporate Performance

After evaluating all the studies on employee ownership and performance, Douglas Kruse at Rutgers testified before Congress in 2002 that companies adopting ESOPs saw a 4% to 5% increased in productivity, had faster employment growth, and had higher rates of long-term survival.[4] Steven Freeman at Wharton, in a 2007 paper, came to the same conclusion about ESOPs after looking at all the existing studies on the issue.[5] In a major project on ESOPs and other forms of broad-based ownership completed in a series of papers in the middle part of this decade, the National Bureau of Economic Research came to the same conclusion as well.[6]

For ESOPs, Blasi and Kruse found in a comprehensive 2000 study that these companies grew about 2.3% per year faster in sales, employment, and productivity than would have otherwise been expected.[7] That remains the largest and most careful analysis of ESOPs in closely held companies. The evidence is more mixed in public companies, but the largest and most recent study, “The ESOP Performance Puzzle in Public Companies,” published in the fall 2006 issue of the Journal of Employee Ownership Law and Finance, by (outside academics) Robert Stretcher, Steve Henry, and Joseph Kavanaugh found that ESOP companies had a 5.5% higher return on net assets and 10.3% higher net profit margin than comparable companies.

In short, before attacking ESOPs as a failed retirement policy, it would be wise to become a good deal more deducted about the topic than the professors did. There is a vast body of research on this topic; they looked at a very small sample and came to some very wrong conclusions.

The National Center for Employee Ownership is a private, nonprofit membership and research organization on broad-based employee ownership. It does not lobby and is not support by grants or contributions. Corey Rosen is its founder and director, and prior to that worked on ESOP legislation on Capitol Hill and taught political science at Ripon College.

[1] by Peter Kardas and Jim Keogh of the Washington Department of Community, Trade, and Economic Development, and Adria Scharf of the University of Washington. In Wealth and Income Consequences of Ownership, (National Center for Employee Ownership, 1998).

[2] An academic paper on these results is in submission; details can be found at http://www.nceo.org/main/article.php/id/3/

[3]EBRI has put out several studies n this topic in recent years. For a complete list, go to http://www.ebri.org/research/index.cfm?fa=trends. The most recent isIndividual Account Retirement Plans: An Analysis of the 2007 Survey of Consumer Finances, With Market Adjustments to June 2009.”

[4] Douglas Kruse, “Research Evidence on Prevalence and Effects of Employee Ownership,” testimony before Subcommittee on Employment Relations, Committee on Education and the Workforce, U.S. House of Representatives, Feb. 13, 2002.

[5] Steven Freeman, “Effects of ESOP Adoption and Employee Ownership: Thirty Years of Research and Experience,” University of Pennsylvania Working Papers, 2007, available at http://repository.upenn.edu/od_working_papers/2/.

[6] See, for instance, Joseph R. Blasi, Richard B. Freeman, Chris Mackin, Douglas L. Kruse, “Creating a Bigger Pie? The Effects of Employee Ownership, Profit Sharing, and Stock Options on Workplace Performance,” NBER Working Paper No. 14230, August 2008/

[7] Joseph Blasi and Douglas Kruse, “ESOPs and Corporate Performance,” paper in submission and summarized at http://www.nceo.org/main/article.php/id/3/.

8.Robert Stretcher, Steve Henry, and Joseph Kavanaugh
The ESOP Performance Puzzle in Public Companies, Journal of Employee Ownership Law and Finance, Fall 2006.

Friday, December 04, 2009

Disappointing and Out of Date Frame of Reference

Well, the White House held its much ballyhooed Jobs Summit yesterday. It made the news, both TV and print, but it did not make much of a splash. There are several reasons why, in my view, but one is it was the same-o, same-o, and in some respects a step backwards.

President Obama and his team put together the usual suspects to “analyze” and “brainstorm” on the American economy. The Administration feels that CEOs of big multi-national corporations, presidents of labor unions, some non-profit think tankers, and a very tiny number of small business reps are going to provide answers on how to create jobs in America.

Very disappointing — for several reasons. In prior Administrations, such as the time President Clinton held an all day roundtable on the workplace early in his Administration, his staff included an employee owner, a machinist, to sit side by side with the labor leaders and the CEOs of big companies.

Then I read where some of the big company CEOs seemed to blame employees for our ills, as being “uneducated,” “not skilled.”  Of course this has a ring of truth as our educational system leaves much to be desired, but would it hurt leaders of some big companies to stop pointing fingers at employees, look in mirror, and think of the company’s training and in-house education, or is time off the assembly line going to hurt the bottom line too much?

Finally, it was disappointing because this Administration wants to hear from leaders of U.S. labor organizations that have around 10 to 12 million members, but not hear a word from those men and women in America who number over 53 million, according to the last General Social Survey (GSS), that have some form of ownership stake in the companies where they work. [Employees owning company stock or holding company stock in the GSS survey numbered nearly 37 million persons; an estimates 11 million of these 37 million are ESOP participants.] More information on these GSS surveys can be found on The ESOP Association’s website here, here, and here.

I know it is disappointing to ESOP fans who read this blog that we are not a positive blip on the Administration’s radar screen when thinking about our economy — keep in mind, there is evidence employee-owned companies create and preserve jobs better than non-employee owned companies.

But instead of lamenting the lack of positive interest in employee stock ownership in the current White House, let us focus on how to turn the situation around.

The ESOP Association working with its ESOP company members is doing a pretty good job of the key protection strategy for ESOP laws by having more and more members of Congress take public stances for protecting and expanding ESOPs.

But it is the Employee Ownership Foundation’s work that funds research and surveys, increases interest in employee ownership among young scholars who will be tomorrow’s advisors to government, and the influential think tanks, that is the best tool to finally make employee ownership at least a topic for review whenever in the future the White House, whoever is President, wants to talk about how to create and protect jobs in America.

Thursday, December 10, 2009

A Tribute to John Logue

Dr. John Logue of Kent State University and the Ohio Employee Ownership Center passed away December 8, 2009 shortly after a cancer diagnosis. We are saddened by the loss of not only a great leader in the employee ownership community but also a good friend.

For those of you who knew John, he was a steadfast proponent of ESOPs and employee ownership and his work has led to the creation of new jobs and the preservation of companies in Ohio that would have otherwise closed.

We want to take a moment to honor John and the work that he has done to help build the ESOP community and make it strong. A note on the Kent State website is here and tribute blog has also been set up for people to leave their thoughts.

On Sunday December 13, a viewing will be held at the Redmon Funeral Home in Stow, OH from 12:00 noon – 4:00 pm.

Redmon Funeral Home

3633 Darrow Rd

Stow, OH 44224


On Monday December 14, at 3:30 pm, a Memorial Service will be held in Kent State University’s Kiva Auditorium at the Kent Student Center. KSU’s Political Science department will provide light snacks at a reception in the Kiva lobby after the service.

A private gravesite service will be held for family members.

Instead of flowers, John’s wife Olga would encourage donations to either:

(1)   Ohio Employee Ownership Center/KSU Foundation; or

(2)   The John Logue Memorial Employee Ownership Scholarship/KSU Foundation

Checks can be sent to:


Kent State University

113 McGilvrey Hall

Kent, OH 44242

John, thank you for all that you gave to the employee ownership community. Your work won’t be forgotten.

Our thoughts and prayers go out to his family.

Wednesday, December 16, 2009

Open Book Management

On The New York Times website, there is an interesting discussion about Open Book Management on the Times’s You’re the Boss Blog. The post is written by Jack Stack, CEO of SRC Holdings in Springfield, MO. SRC Holdings is an ESOP and a member of The ESOP Association.

The topic of open-book management comes up often in the ESOP world. Does your company open the books to employee owners?

Friday, December 18, 2009

Spreading the ESOP Message: Peer to Peer

While the Employee Ownership Foundation is involved in numerous projects to share the idea of employee ownership with the non-ESOP world (such as the Steve Sheppard Speaking Tour, the General Social Survey, and Fellowship Programs), we also recognize that ESOP advocates promoting the ESOP message at meetings and conferences of their peer groups is an important, and effective way, to spread the word. Some might call it ESOP “missionary work” with tongue in cheek, but when a lawyer, accountant, valuator, financial planner, and other experts in ESOPs make presentations, or write articles for their professional groups, that is precisely preaching for ESOPs.

For example, ESOP Association members Ronald J. Gilbert, CLU, ChFC; Dickson C. Buxton, CLU, ChFC; Bryan J. Golden, MS; and Paige A. Ryan, MIB presented “Navigating through Tough Times with the Aid of Employee Ownership” at a recent event in Boston held by the American College Knowledge Summit.   If you click here, you can find out more information about the program.

Taking the time to share information about ESOPs peer to peer as these Association members did is an example of how all of us can increase the number of ESOPs in America and makes us stronger. The Employee Ownership Foundation will work to continue its outreach in 2010.

Monday, December 21, 2009

Senator Sanders and Colleagues Propose New, and Effective, Ideas to Save American Jobs

We wanted to share with everyone the following press release which was sent out by The ESOP Association this morning about new pro-ESOP legislation introduced by Senator Bernard Sanders [I-VT] on December 18, 2009.

Senator Sanders and Colleagues Propose New, and Effective, Ideas to Save American Jobs


December 21, 2009 (Washington, DC) – The ESOP Association praised legislation introduced Friday, December 18, by Senator Bernard Sanders [I-VT], and co-sponsored by three Senate colleagues: Senators Sherrod Brown [D-OH], Patrick J. Leahy [D-VT], and Robert Menendez [D-NJ]. The first bill, S. 2909, is to provide state programs to encourage employee ownership and participation in business decision making throughout the United States. The second, S. 2914, would provide for the establishment of the United States Employee Ownership Bank.

In a communication to his colleagues, Senator Sanders made these points about the benefits of employee ownership: The economy benefits because, absent employee ownership, many businesses would close down or ship jobs overseas; With employee ownership, businesses stay open and employ American employees; Retiring small business owners find buyers for their businesses [the employees], compensating them for years of hard work; Employee owners retain their jobs, share in future profits, and have greater control over their own vocation; Company performance is often improved through increases in productivity due to employee ownership and participation; and the community benefits from having the company more deeply rooted in the community.

“We are, needless to say, excited that Senator Sanders and three colleagues have put forward these two bills,” said J. Michael Keeling, president of The ESOP Association. “S. 2909 seeks to expand programs that several states have established to help business owners create employee-owned companies. S. 2914 is a bold new approach proposing, for the first time, a Federal loan guarantee program to save jobs in certain situations when the result of the financing would be a company owned 50% or more by the employees.”

The ESOP Association is the national trade association for companies with employee stock ownership plans (ESOPs) and the leading voice in America for employee ownership. The core cause of The ESOP Association is the belief that employee ownership will improve American competitiveness, increase productivity through greater employee participation, and strengthen our free enterprise economy.



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