The Social Venture Network will be holding its annual conference in Tucson April 12-15 and will have, for the first time, a session on employee ownership. The organization is made up of businesspeople involved in socially responsible enterprises.
On August 30th, the IRS published final regulations disallowing deductions for the repurchase of ESOP shares (26 CFR, Part 1, TD 9282). The regulations were necessitated because of a Ninth Circuit Court of Appeals decision (Boise Cascade Corporation v.
Final regulations on deferred compensation rules under Internal Revenue Code Section 409(A) still have not been issued, leading many observers to believe the rules will allow companies until the end of 2007, rather than 2006, to amend current plans to make them compliant with the new requirements
The class action lawsuit against trustees of the Sprint Corporation's 401(k) plan was one of the largest "stock-drop" lawsuits to date. It has now been settled out of court for a relatively modest $25 million. Each class member will get $63 in cash.
Blue Heron Paper in Oregon City, Oregon, is now 100% owned by its ESOP. The company is one of a small number of companies where an ESOP was used to rescue a plant from closing.
Fiduciary Counselors, an independent fiduciary company, has compiled a very useful table of all the settlements involving employer stock as well as other ERISA class action litigation over the last 10 years.
According to a study by Jack Ciesielski of the Analyst's Accounting Observer Newsletter, 887 companies accelerated options vesting between 2004 and 2006, thus avoiding reporting an estimated $6 billion in accounting costs.
Over 100 companies are now reported to be under investigation, internally or by the SEC, for backdating their stock options (recording the grant date as being a prior date when the stock price was low) or "spring-loading" their options (issuing options just before issuing good news).
In a study of over 5,000 participants in nine ESOP companies, Robert Buchele, Douglas Kruse, and Joseph Blasi found that employees in ESOP companies appear to be more engaged than employees in general.
