Employee Ownership Blog

Of the 72 employers on the 2011 Fortune magazine 100 Best Companies to Work For list that are for-profit, U.S.-based, and not legal or accounting partnerships, 39 (54%) have some form of broad-based employee ownership. That percentage has stayed remarkably consistent year after year.

In the last few months, we have been asked to take a look at some draft equity compensation plans in closely held companies. Each was drawn up by an attorney with limited experience doing this. Each had major technical issues that could cause problems down the line.

Speaking at a recent NCEO Webinar, Rebecca Miller of McGladrey & Pullen said that the Financial Accounting Standards Board has shelved its project on whether the ESOP repurchase obligation should show up as a liability on the balance sheet.

The Certified Equity Professional Institute (CEPI) at Santa Clara University provides the gold-standard certification for equity plan administrators. Given the risks that errors in plan administration entail, it is essential that companies hire certified professionals to do the job.

Principal Financial has long sponsored an annual competition to name the 10 best small and mid-sized companies for employee financial security. Companies must have fewer than 1,000 employees to apply.

Twice a month, we send out an email bulletin that includes highlights of the latest installment in this column, news about upcoming events, new features on this site, and other NCEO projects.

A new NCEO survey of over 420 ESOP companies on how they handle their repurchase obligations found that the most commonly used method of funding current-year ESOP distributions is cash from company operations.

One of the more notable trends in ESOPs over the last several years has been the move to more outside, independent directors.

Options and other kinds of equity plans have been very common in the Indian technology sector. A number of other companies offer the plans as well, but not as commonly. Over the years, the number of companies granting equity awards broadly has moved up and down fairly dramatically.

The Innovations Award recognizes creative ideas in the employee ownership community. Learn more and fill out a brief application by February 10.

In Brown v. Medtronic Inc., No. 09-2524 (8th Cir., Dec. 13, 2010), a circuit court ruled that an employee who sold stock at a profit lacked standing to sue even if alleged fiduciary violations in the offering of company stock in a 401(k) plan were true.

The increasing interest in secondary markets for shares of closely held companies has prompted the SEC to take a closer look at these practices.