The September 30, 2008 Employee Ownership Update is online and discusses the following:

As you know from reading this blog, we have discussed Employee Motivation and how communications and motivational techniques may be more effective if the Motivational Buttons of each generation are targeted. Employee Ownership: Adapting a Powerful Business Strategy to Attract and Retain the Next Generation of Talent discusses how employee ownership structures will need to be adjusted for the values and career goals of the next generation of talent (often referred to as Generation Y or the Millennials). The article notes that 80% of the "100 Best Companies to Work For" have an ESOP or other form of employee ownership. It also discusses the imminent shortage of talent as predicted in The War for Talent and asks if employee ownership is the "magic bullet" to attract and retain the talent of the future:

Atlas Steel Products Co. (Twinsburg, OH)

The 2008 PCPS Succession Survey provides succession planning revelations, conclusions, and recommendations for CPA firms:

A press release announces that Republican Presidential Candidate Senator John McCain released a statement declaring his support for ESOPs:

Employee Ownership as a Model for Securing, Sustaining Business looks at employee ownership as a tool for economic development for the state of Minnesota:

Tribune, Zell Named in Employees' Suit discusses how six current and former L.A. Times reporters have filed a federal class action lawsuit (CV08-06040) alleging that Sam Zall and other Tribune officials failed to uphold their fiduciary duty to the ESOP:

The Experiential Classroom has been a great platform from which to make the case that employee ownership ought to be a fundamental part of any curriculum in business or entrepreneurship. It also reveals the incredible power of case teaching. Case teaching helps students develop a broad understanding of a subject area, and it offers a way for business and entrepreneurship professors to easily integrate new concepts like employee ownership into their programs.

Lehman Files for Bankruptcy, Merrill Sold discusses the recent news involving Lehman Brothers Holdings Inc. and Merrill Lynch & Co., who were both mentioned after the Bear Stearns sale as being companies that were more than 25% employee-owned. UPDATE: Lehman Workers Brace For The Worst discusses the impact of the Lehman bankruptcy on the employees and once again uses a broad brush to paint employee ownership negatively:

The September 15, 2008 Employee Ownership Update is online and discusses the following:

Employee Ownership: What Every Professional Service Provider Ought to Know discusses what all business professionals should know about employee ownership:

California’s Franchise Tax Board (FTB) Notice 2008-4 – Resolution of Certain ESOP Transactions discussed the opportunity for taxpayers who filed a tax return that included "certain ESOP transactions" to resolve their accounts to avoid the noneconomic substance transaction (NEST) penalty. In order to resolve the "certain ESOP transactions" that may be subject to the NEST penalty, taxpayers must submit a signed and completed closing agreement by today (September 12), and pay all tax, penalties, and interest.

Deductible Redemptive Dividends Used to Fund ESOP Distributions discusses how the courts allowed a company to use redemptive dividends to make distribution payments in Boise Cascade Corp. v. U.S. (9th Cir., No. 01-36086, 5/20/03) and General Mills v. United States, No. 06-3547 (D. Minn. 1/14/08).

Summary Plan Descriptions Under Scrutiny discusses how, despite the disclaimer language, courts will not always enforce the plan document provisions if they are different than the SPD provisions:

Trelease v. Metro. Life Ins. Co., 2008 U.S. Dist. LEXIS 66400 (D.N.J. Aug. 29, 2008) was discussed in the September 8 BNA Daily Tax Report. The case alleges that, upon the March 2003 advice of the defendants, the plaintiffs established a management company that was intended to be a 100% ESOP-owned S Corporation that would be exempt from federal taxes. While it is unclear whether the transaction was a Management S Corporation ESOP Transaction as discussed in IRS Announcement 2005-80, 2005-2 I.R.B. 967 – Settlement Initiative (#21), it is clear that the arrangement was in violation of the IRC Section 409(p) Anti-Abuse Regulations. In addition to clearly violating the anti-abuse regulations, a subchapter S election was never filed.

STERLING Engineering, Inc. (Maryville, TN)

Executive Briefing discusses a recent S Corporation study that we discussed in Study: S ESOP Companies Create Jobs and Savings for Workers and Have Higher Productivity, Profitability, Job Stability, and Job Growth:

I will be presenting Why CPAs Must Know About Employee Stock Ownership Plans (ESOPs) on Friday, September 12, 2008. This is a Wisconsin Institute of Certified Public Accountants (WICPA) program, but you do not need to be a member to attend. At only $40 (for members and nonmembers), this program provides a great way to earn 4 CPE credits and learn more about ESOPs:

Indiana IT Company Becomes Employee Owned is a press release that describes how the AME Group, an Indiana IT consulting group, has sold the remainder of their company to an ESOP as part of a succession plan:

Research: Shared Capitalism, Shirking, Workplace Performance, Employee Ignorance, and Innovation shared some ESOP and employee ownership working papers from the National Bureau of Economic Research (NBER). Here are links to two additional ESOP and employee ownership related working papers:

TECHNOLOGY

Bear Stears was first, then U.S. Sugar, and now Fannie Mae and Freddie Mac are being highlighted as poster children for how bad an ESOP can be for a company. As a point of note here, Freddie Mac does NOT have an ESOP. However, the article goes out of its way to create tangential links between ESOPs and failing companies using all the above examples as reasons why individuals should not own stock in their companies.

The results of the Employee Ownership Foundation's 17th Annual ESOP Economic Performance Survey (EPS) are discussed in 92.4% of Companies State ESOPs are Good Business Survey Reveals Positive Results for ESOP Companies:

Worker Assets Shrink at Fannie and Freddie is the latest by-the-formula, overly sensational anti-ESOP article. This time the companies are Fannie Mae and Freddie Mac, but the theme of the article is the same:

The August 29, 2008 Employee Ownership Update is online and discusses the following: