The March 15, 2011 Employee Ownership Update is online and discusses the following:

• Top Executives Exercised About $25 to $30 Billion per Year in Equity Programs from 2001 to 2007


• Department of Labor Holds Hearing on ESOP Appraiser and Other Fiduciary Proposals


• Great Game of Business Conference Coming Up May 4-6


• Foundation for Enterprise Development "Creating Wealth by Sharing Wealth" Nationwide University Essay Contest Winners Announced

The Update shares some highlights from the DOL Hearing on the proposed DOL fiduciary regulations. The DOL does not see a conflict with both the ESOP appraiser and trustee acting as fiduciaries and that the DOL might rewrite the proposed regulations to provide that an appraiser's job is to find the correct fair market value:

On the uniqueness of employee-owned companies: There are at least two issues here; structure and culture. Structurally employee owned companies have fewer external constituencies, e.g. investors, shareholders engaged in the governance structure. Hence there is more of a long term focus on company performance and employee and management voice in governance. This difference in structure of course translates directly into culture where behavior is much more focused in broad based engagement of employees in driving innovation and customer interface. These employees are encouraged to behave entrepreneurially since they have a real sense of ownership and control of their futures, rather than waiting for someone else to innovate or make a decision. My sense is that corporate culture is part of the DNA of a company and is best embedded from the beginning. Corporate cultures are very difficult to change once bureaucratic structures become entrenched.

H.R. 1244: Promotion and Expansion of Private Employee Ownership Act of 2011 was introduced on March 29, 2011, by Rep. Dave Reichert [R-WA8], and is currently co-sponsored by Earl Blumenauer [D-OR3], Charles Boustany [R-LA7], Ronald Kind [D-WI3], William Pascrell [D-NJ8], and Erik Paulsen [R-MN3]. It has been referred to the following committees: House Ways and Means committee, House Education and the Workforce committee, and the House Small Business committee.

H.R. 786: To amend the Internal Revenue Code of 1986 to exclude from gross income compensation received by employees consisting of qualified distributions of employer stock was introduced on February 17, 2011, by Rep. Dana Rohrabacher [R-CA46], and is currently co-sponsored by Walter Jones [R-NC3], Thaddeus McCotter [R-MI11], and David McKinley [R-WV1]. It has been referred to the House Ways and Means committee. The bill is very similar to H.R. 692: To amend the Internal Revenue Code of 1986 to exclude from gross income compensation received by employees consisting of qualified distributions of employer stock from the 111th U.S. Congress. Here is the full text of the bill:

S. 101: Employee Stock Ownership Plan Promotion and Improvement Act of 2011 was introduced on January 25, 2011, by Sen. John Ensign [R-NV], and is currently co-sponsored by John Isakson [R-GA]. This is the first ESOP Legislation of the 112th United States Congress. It has been referred to the Senate Finance committee. The bill is very similar to H.R. 5207: Employee Stock Ownership Plan Promotion and Improvement Act of 2010 from the 111th U.S. Congress. Here is the full text of the bill:

Seven "Hidden" Factors that Affect Company Values discusses seven key valuation factors that are often overlooked by management:

Role

The March 1, 2011 Employee Ownership Update is online and discusses the following:

Update on DOL Proposed Rule Negative to ESOP Companies provides commentary on yesterday's DOL Public Hearing on the proposed DOL regulations to define ESOP appraisers as fiduciaries:

On March 2, 2011 the American Society of Appraisers testified at an Employee Benefits Service Administration (EBSA), Department of Labor Hearing in Washington, DC on EBSA's proposed "fiduciary" rule. Donna Walker, ASA, testified on behalf of the American Society of Appraisers (ASA).