Employee Ownership Companies Again Dominate Best 100 Companies List

More than half of the for-profit corporations on the Great Place to Work Institute's "100 Best Companies to Work For in America" list have broad-based employee ownership, a trait that frequently distinguishes the companies that appear on the San Francisco-based firm's annual list. Of the 85 companies that are not nonprofits or professional partnerships, 48 had some kind of employee ownership plan: 12 gave options to most or all employees in the last year, 43 had employee stock purchase plans (ESPPs), and 18 had ESOPs. Ten of the companies with broad-based option plans also had ESPPs and the other two had ESOPs. Eleven of the 18 ESOP companies had ESPPs as well. This does not count companies that have employer stock in their 401(k) plans. Six of the companies are majority employee owned (W.L. Gore & Associates, TD Industries, Publix Supermarkets, PCL Construction Enterprises, CH2M Hill, and Quad/Graphics).

The Great Place to Work Institute also provides consulting for companies about how to become great places to work. Companies on the list have consistently outperformed the larger market by a substantial margin. A list of all the companies appears in the NCEO's March/April newsletter.
IRS May Investigate "Designer" Stock in ESOPs

Department of the Treasury Acting Benefits Counsel W. Thomas Reeder told BNA that the IRS may investigate potentially abusive "designer" stock in ESOPs. Many ESOP companies use preferred stock or super common stock as a means to increase the amount of deductible dividends they can pay on ESOP shares, to create a capital structure that allows buyers of common stock to buy more shares for their investment (because the ESOP's shares carry additional rights), and/or provide the ESOP participants with a lower risk investment. While these structures can be and usually are entirely legitimate, the IRS apparently is concerned they can also be abused.