Woolworth's, the 30,000-employee retail chain in the United Kingdom, is facing severe financial difficulty and is now in the British equivalent of Chapter 11.
Closely held ESOP companies will face the probability of declining stock value even if their business is holding up. ESOP valuation specialists tell us that the multiples they use to value businesses will drop to reflect the declining multiples paid for companies in general.
The new Congress and Administration will be under increased pressure to reduce employee holdings of company stock in retirement plans. Many financial advisors have been urging such restrictions in the last several weeks.
One of the most common arguments against ESOPs is that they substitute for other compensation, replacing cash or diversified retirement investments with risky stock.
CasePlace.org, a compendium of case studies for business schools and other users, has compiled a large number of employee ownership case studies. Some are from the NCEO, others are from academic journals and papers.
The Antioch Company in Yellow Springs, OH, has filed for Chapter 11 bankruptcy. Antioch is one of the more remarkable ESOP stories. A small printing company with a long history of pro-employee policies, it set up an ESOP in 1979.
The NCEO is looking for a part-time project director to focus on the marketing and development of NCEO equity compensation materials and training programs.
If you are interested in running for the NCEO board of directors, please send in a 100-word nomination describing yourself and your qualifications to Corey Rosen at [email protected].
A new NCEO survey of 222 diverse ESOP companies shows that 75% have experienced no change in access to long-term credit and 79% have had no change in access to short-term credit.
Early in his administration, French President Nicolas Sarkozy proposed new legislation to encourage more broad-based employee ownership, but his political problems put that on hold. Now the worldwide financial crisis has given the concept new life.
