Employee Ownership Blog

There is still no consensus on just what the Financial Accounting Standards Board (FASB) really means by its new FAS 150, an accounting protocol effective May 2003 that requires companies to record a liability on their balance sheets for mandatorily redeemable obligations, including "puttable sto

The SEC has approved new rules for the New York Stock Exchange and the NASDAQ for shareholder approval of equity plans. The rules are effective June 30, with very limited transition rules for some existing plans. For the NYSE, the new rules are Section 303A(8) of the Listed Company Manual.

In proposed regulations published June 9, 2003 (26 CFR Parts 1 and 14a, Reg 122917-02, June 9, 2003), the Internal Revenue Service proposed an update, reorganization, and elaboration of existing rules governing incentive stock options and employee stock purchase plans (ESPPs).

The Department of Labor has sued the fiduciaries of Enron's 401(k) plan and ESOP for improperly encouraging employees to invest in Enron stock and for continuing to hold Enron shares in the plan when there were reasons to believe that was not prudent.

In May of 2003, the Financial Accounting Standards Board (FASB) issued FAS 150, a new accounting guideline that appears to require companies with "mandatorily redeemable shares, which the issuing company is obligated to buy back in exchange for cash or other assets" to book the liability this obl

A newly released survey by Fidelity Investments shows that 25% of respondents say they have little or no understanding of their stock purchase plan and one-third have little or no understanding of their stock option plan.

In Boise Cascade Corp. v. U.S. (9th Cir., No. 01-36086, 5/20/03), the Ninth Circuit Court of Appeals ruled that Boise Cascade could take a tax deduction for distributions of convertible preferred stock from the company's ESOP.

The House has passed H.R. 1000, the Pension Security Act of 2003. The bill would exclude all ESOPs from its requirements except ESOPs in public companies that are combined with 401(k) plans or that allow employees to buy stock through deferrals into the plan.

The Bush Administration has dropped its sweeping proposals for reforming retirement plan law. Prospects for the idea resurfacing in the future seem small.

In action taken May 7, members of the Financial Accounting Standards Board (FASB) indicated they may take a somewhat different approach than the International Accounting Standards Board on some key issues.

Proposals to require that Intel and PeopleSoft expense their stock options narrowly lost in recent votes. The closeness of the votes is further evidence that the tide toward expensing has shifted.

Cass Ballenger (R-NC), Rob Portman (R-OH), Nancy Johnson (R-CT) and Dana Rohrabacher (R-CA) have introduced H.R.