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Employee stock ownership plan

An employee stock ownership plan (ESOP) is anemployee-owner program that provides a company'sworkforce with an ownership interest in the company. Inan ESOP, companies provide theiremployeeswithstockownership, often at no up-front cost to the employees.ESOPshares, however, are part of employees remunera-tion for work performed. Shares are allocated to employ-ees and may be held in an ESOP trust until the employeeretires or leaves the company. The shares are then sold.

Some corporations are majority employee-owned; the

term employee-owned corporationoften refers to suchcompanies. Such organizations are similar toworker co-operatives, but unlike cooperatives, control of the com-panys capital is not necessarily evenly distributed. Com-pared with cooperatives, ESOP-centered corporations al-low for company executives to have greater flexibility ingoverning and managing the corporation. Most corpora-tions, however, utilize stock ownership plans as a form ofin-kind benefit, as a way to preventhostile takeovers, orto maintain a specific corporate culture. These plans gen-erally prevent average employees from holding too muchof the companys stock.

1 UK

See also:UK company lawandUK labour law

ESOPs became widespread for a short period in the UKunder the government of Margaret Thatcher, particularlyfollowing theTransport Act 1985, which deregulated andthen privatised the bus services. Councils seeking to pro-tect workers ensured that employees accessed shares as

privatisation took place, but employee owners soon losttheir shares as they were bought up and bus companieswere taken over.[1] The disappearance of stock plans wasdramatic.[2]

TheJohn Lewis Partnershiphas been cited as an exampleof an employee share ownership.[3][4][5][6] However, un-like some other employee ownership arrangements, part-ners in John Lewis have no proprietary right to their stake,and cannot buy or sell their rights, nor collective dissolvethe entity.[7] ESOPs are almost entirely opposite becauseat John Lewis, employees get a voice at work but cannottrade an ownership stake; an ESOP typically carries no

meaningful voice but allows the interest to be bought andsold.

In July 2012, the Department for Business Innovation and

Skills published a report called, The Employee Owner-ship Advantage, Benefits and Consequences.[8] This re-port listed several major advantages of employee own-ership including stronger long-term focus; increased em-ployee representation at board level; and greater prefer-ence for internal growth. The report also highlighted thatemployee owned businesses face greater problems whenit comes to raising capital and dealing with regulatory re-quirements. The study was based on data from a surveyof 41 employee-owned businesses and 22 non-employee

owned businesses in the United Kingdom, and also drawsupon the published financial data of 49 EOBs and 204non-EOBs in the UK.

The Chancellor of the ExchequerGeorge Osbornean-nounced in a speech at the Conservative Party Conferenceon 8 October 2012 that the law would be reformed to cre-ate a new employment status for employee-owners.[9]

Employee-owners will pay no capital gains tax on anyprofit made from selling these shares, but will have togive up certain employment rights in return, includingredundancy andunfair dismissal. The consultation byBISwas published on 18 October 2012.[10] Lawyers have

suggested that the employee-owner scheme could havesignificant unintended consequences as, under the exist-ing proposal, it may be possible for entrepreneurs to setthemselves up as employee owners in order to avoid cap-ital gains tax. In practice, these entrepreneurs will befar more owner than employee and the employmentrights they will be giving up are likely to be of much lessvalue to them than to ordinary employees, and so the taxadvantages of far greater value to them than to ordinaryemployees.

On 3 December 2012, the Government published its re-sponse to the consultation. It had decided to press ahead

with the changes despite 92% of responses to the consul-tation being either negative or mixed,[11] and despiteit being widely derided both in the House of Lords and inbusiness chambers across the country.[12] The term em-ployee owner was dropped in favour of the more accu-rate employee shareholder. Lawyers have commentedthat uncertainty remains as to how these proposals willoperate in practice.

In April 2013, the Enterprise and Regulatory Reform Billwas passed and receivedRoyal Assent. Implementationof the employee-shareholder provisions was expected totake place in October 2013. The employee ownership

provisions received significant amendment in the Houseof Lords, with the unintended consequence possibly be-ing thattrade unionsmay now benefit.[13]

1
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2 2 US

At the end of June 2013, it became clear Osbornes petprojectit had been the centrepiece of his Conserva-tive party conference speech in 2012had flopped afterit emerged that just four companies had enquired abouthis shares-for-rights scheme, while only two had gone thefurther step of asking for information about it; the chan-

cellor had been expecting thousands of firms to actuallysign up.[12] One UK official commented that, it was anoutrageously, terribly low figure,[12] and even the Tory-leaning press described the failed idea as Osborne at hisworst.[14]

2 US

An employee stock ownership plan (ESOP) is a definedcontribution plan, a form of retirement plan as definedby 4975(e)(7)of IRS codes, which became a qualified re-

tirement plan in 1974.[15][16] It is one of the methods ofemployee participation in corporate ownership.[17]

ESOPs are regulated byEmployee Retirement IncomeSecurity Act(ERISA), a federal law that sets minimumstandards for investment plans in private industry.[17] In-ternal Revenue Code section 404(a)(3) provides for anannual limit on the amount of deductible contributionsan employer can make to a tax-qualified stock bonus orprofit-sharing plan of 25 percent of thecompensation oth-erwise paid or accrued during the year to the employeeswho benefit under the plan.

TheOakland, California-basedthink tank National Cen-ter for Employee Ownershipestimates that there are ap-proximately 11,300 employee stock ownership plans forover 13 million employees in the United States.[18][19][20]

Notable U.S. employee-owned corporations include the150,000 employee supermarket chainPublix Supermar-kets, Hy-Vee, McCarthy Building Company, environ-mental consulting firm Citadel Environmental Services,Inc., the craft breweryNew Belgium Brewery, and pho-tography studio companyLifetouch. Today, most privateU.S. companies that are operating as ESOPs are struc-tured as S corporation ESOPs (S ESOPs).

2.1 History

In the mid-19th century, as the United States transi-tioned to an industrial economy, national corporationslikeProcter & Gamble,Railway Express,Sears & Roe-buck, and others recognized that someone could work forthe companies for 20 plus years, reach an old age, andthen have no income after they could no longer work.Theleaders of those 19th century companies decided to setaside stock in the company that would be given to em-ployees when they retired.

In the early 20th century, when the United States sanc-tioned anincome taxon all citizens, one of the biggestdebates was about how to treat stock set aside for an em-

ployee by his employer under the new US income taxlaws.

ESOPs were developed as a way to encourage capital ex-pansion and economic equality. Many of the early pro-ponents of ESOPs believed that capitalisms viability de-

pended upon continued growth and that there was no bet-ter way for economies to grow than by distributing thebenefits of that growth to the workforce.[21]

In 1956, Louis Kelso invented the first ESOP, whichallowed the employees of Peninsula Newspapersto buyout the company founders.[22] Chairman of the SenateFinance Committee, SenatorRussell Long, a Democratfrom Louisiana, helped develop tax policy for ESOPswithin theEmployee Retirement Income Security Act of1974(ERISA), calling it one of his most important ac-complishments in his career.[23] ESOPs also attracted in-terest of Republican leaders includingBarry Goldwater,Richard Nixon, andGerald Ford, andRonald Reagan.[24]

In 2001, the United States Congress enacted Internal Rev-enue Code section 409(p), which effectively requires thatS ESOP benefits be shared equitably by investors andworkers. This ensures that the ESOP includes everyonefrom the receptionist to the CFO.[25]

2.2 Forms

Like other tax-qualified deferred compensation plans,ESOPs must not discriminate in their operations in favorof highly compensated employees, officers, or owners.

In an ESOP, a company sets up an employee benefit trustthat is funded by contributing cash to buy company stockor contributing company shares directly. Alternately, thecompany can choose to have the trust borrow money tobuy stock (also known as a leveraged ESOP,[26] with thecompany making contributions to the plan to enable itto repay the loan. Generally, almost every full-time em-ployee with a year or more of service who worked at least20 hours a week is in an ESOP.

The United States ESOP model is tied to the unique USsystem encouraging private retirement savings plans andtax policies that reflect that goal. That makes it difficult

to compare to other tax codes from other nations.

2.3 S corporation ESOP

Most private US companies operating as an ESOP arestructured as S corporation ESOPs (S ESOPs). TheUnited States Congressestablished S ESOPs in 1998, toencourage and expand retirement savings by giving mil-lions more American workers the opportunity to have eq-uity in the companies where they work.

ESOP advocates credit S ESOPs with providing retire-

ment security, job stability and worker retention, by theclaimed culture, stability and productivity gains asso-ciated with employee-ownership. A study of a cross-
https://en.wikipedia.org/wiki/United_States_Congresshttps://en.wikipedia.org/wiki/Ronald_Reaganhttps://en.wikipedia.org/wiki/Gerald_Fordhttps://en.wikipedia.org/wiki/Richard_Nixonhttps://en.wikipedia.org/wiki/Barry_Goldwaterhttps://en.wikipedia.org/wiki/Employee_Retirement_Income_Security_Act_of_1974https://en.wikipedia.org/wiki/Employee_Retirement_Income_Security_Act_of_1974https://en.wikipedia.org/wiki/Russell_Longhttps://en.wikipedia.org/wiki/Louis_Kelsohttps://en.wikipedia.org/wiki/Income_taxhttps://en.wikipedia.org/wiki/Sears_&_Roebuckhttps://en.wikipedia.org/wiki/Sears_&_Roebuckhttps://en.wikipedia.org/wiki/Railway_Expresshttps://en.wikipedia.org/wiki/Procter_&_Gamblehttps://en.wikipedia.org/wiki/Lifetouchhttps://en.wikipedia.org/wiki/New_Belgium_Brewing_Companyhttps://en.wikipedia.org/wiki/Hy-Veehttps://en.wikipedia.org/wiki/Publix_Supermarketshttps://en.wikipedia.org/wiki/Publix_Supermarketshttps://en.wikipedia.org/wiki/National_Center_for_Employee_Ownershiphttps://en.wikipedia.org/wiki/National_Center_for_Employee_Ownershiphttps://en.wikipedia.org/wiki/Think_tankhttps://en.wikipedia.org/wiki/Oakland,_Californiahttps://en.wikipedia.org/wiki/Employee_Retirement_Income_Security_Acthttps://en.wikipedia.org/wiki/Employee_Retirement_Income_Security_Acthttps://en.wikipedia.org/wiki/Defined_contribution_planhttps://en.wikipedia.org/wiki/Defined_contribution_plan


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2.4 Advantages and disadvantages to employees 3

section of Subchapter S firms with an Employee StockOwnership Plan shows that S ESOP companies per-formed better in 2008 compared to non-S ESOP firms,paid their workers higher wages on average than otherfirms in the same industries, contributed more to theirworkers retirement security, and hired workers when the

overall U.S. economy was pitched downward and non-SESOP employers were cutting jobs.[27] Scholars estimatethat annual contributions to employees of S ESOPs to-tal around $14 billion.[21] Critics say, however, that suchstudies fail to control for factors other than the existenceof the ESOP, such as participatory management strate-gies, worker education, and pre-ESOP growth trends inindividual companies. They maintain that no studies haveshown that the presence of an ESOP itself causes anypositive effects for companies or workers.;[28]:27[29] Onestudy estimates that the net US economic benefit from SESOP savings, job stability and productivity totals $33

billion per year.[21]

A study released in July 2012 found that S corporationswith private employee stock ownership plans added jobsover the last decade more quickly than the overall privatesector.[30]

A 2013 study found that in 2010, 2,643 S ESOPs directlyemployed 470,000 workers and supported an additional940,000 jobs, paid $29 billion in labor income to theirown employees, with $48 billion in additional income forsupported jobs, and tax revenue initiated by S ESOPsamounted to $11 billion for state and local governmentsand $16 billion for the federal government. Also, the

study found that total output was equivalent to 1.7 per-cent of 2010 U.S. GDP. $93 billion (or 0.6 percent ofGDP) came directly from S ESOPs, while output in sup-ported industries totaled $153 billion (or 1.1 percent ofGDP).[31]

2.4 Advantages and disadvantages to em-

ployees

In a US ESOP, just as in every other form of qualifiedpension plan, employees do not pay taxes on the contribu-

tions until they receive a distribution from the plan whenthey leave the company. They can roll the amount overinto an IRA, as can participants in any qualified plan.There is no requirement that a private sector employerprovide retirement savings plans for employees.

Some studies conclude that employee ownershipappears to increase production and profitabilityand improve employees dedication and sense ofownership.[32][33][34][35][36] ESOP advocates maintainthat the key variable in securing these claimed benefitsis to combine an ESOP with a high degree of workerinvolvement in work-level decisions (employee teams, forinstance). Employee stock ownership can increase theemployees financial risk if the company does badly.[37]

ESOPS, by definition, concentrate workers retirement

savings in the stock of a single company. Such concen-tration is contrary to the central principle of modern in-vestment theory, which is that investors should diversifytheir investments across many companies, industries, ge-ographic locations, etc.[28] :811[38] Moreover, ESOPs con-centrate workers retirement savings in the stock of the

same company on which they depend for their wagesand current benefits, such as health insurance, worsen-ing the non-diversification problem.[38]:811 High-profileexamples illustrate the problem. Employees at compa-nies such as EnronandWorldComlost much of theirretirement savings by over-investing in company stockin their 401(k) plans, but these specific companies werenot employee-owned. Enron,Polaroidand United Air-lines, all of which had ESOPs when they went bankrupt,were C corporations. Most S corporation ESOPs of-fer their employees at least one qualified retirement sav-ings plan like a 401(k) in addition to the ESOP, allow-

ing for greater diversification of assets. Studies in Mas-sachusetts, Ohio, and Washington state show that on av-erage, employees participating in the main form of em-ployee ownership have considerably more in retirementassets than comparable employees in non-ESOP firms.The most comprehensive of the studies, a report on allESOP firms in Washington state, found that the retire-ment assets were about three times as great, and the di-versified portion of employee retirement plans was aboutthe same as the total retirement assets of comparable em-ployees in equivalent non-ESOP firms. The Washingtonstudy, however, showed that ESOP participants still hadabout 60% of their retirement savings invested in em-

ployer stock. Wages in ESOP firms were also 5-12%higher. National data from Joseph Blasi and DouglasKruse at Rutgers shows that ESOP companies are moresuccessful than comparable firms and, perhaps as a result,were more likely to offer additional diversified retirementplans alongside their ESOPs.

Opponents to ESOP have criticized these pro-ESOPclaims, that many of the studies are conducted or spon-sored by ESOP advocacy organizations and criticizing themethodologies used.[38][39] Critics argue that pro-ESOPstudies did not establish that ESOPs results in higher pro-ductivity andwages. ESOP advocates agree that an ESOP

alone cannot produce such effects; instead, the ESOPmust be combined with worker empowerment throughparticipatory management and other techniques. Crit-ics point out that no study has separated the effects ofthose techniques from the effects of an ESOP; that is, nostudy shows that innovative management cannot producethe same (claimed) effects without an ESOP. [28]:36

In some circumstances, ESOP plans were designed thatdisproportionately benefit employees who enrolled earlierby accruing more shares to early employees. Newer em-ployees even at stable and mature ESOP companies canhave limited opportunity to participate in the program,

as a large portion of the shares may have already beenallocated to longstanding employees.[40]
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4 3 OTHER FORMS OF EMPLOYEE OWNERSHIP

ESOP advocates often maintain that employee ownershipin 401(k) plans, as opposed to ESOPs, is problematic.About 17 percent of total 401(k) assets are invested incompany stock, more in those companies that offer it asan option (although many do not). Pro-ESOP advocatesconcede that this may be an excessive concentration in a

plan specifically meant to be for retirement security. Incontrast, they maintain that it may not be a serious prob-lem for an ESOP or other options, which they say aremeant as wealth building tools, preferably to exist along-side other plans. Nonetheless, ESOPs are regulated asretirement plans, and they are presented to employees asretirement plans, just like 401(k) plans.

2.5 Conflicts of interest

Because ESOPs are the only retirement plans allowed bylaw to borrow money, they can be attractive to companyowners and managers as instruments of corporate financeand succession.[28]:1416 An ESOP formed using a loan,called a leveraged ESOP, can provide a tax-advantagedmeans for the company to raise capital.[28]:1415 Accord-ing to a pro-ESOP organization, at least 75% of ESOPsare, or were at some time, leveraged. According to citingESOP Association statistics as cited in.[28]:1416 In addi-tion, ESOPs can be attractive instruments of corporatesuccession, allowing a retiring shareholder to diversifyhis or her company of stock while deferring capital gainstaxes indefinitely.[41]

Company insiders face additional conflicts of interest inconnection with an ESOPs purchase of company stock,which most often features company insiders as sellers andin connection with decisions about how to vote the sharesof stock held by the ESOP but not yet allocated to partic-ipants accounts.[28]:1619 In a leveraged ESOP, such un-allocated shares often far outnumber allocated shares formany years after the leveraged transaction.[28]:1921

3 Other forms of employee owner-

ship

Stock options and similar plans(stock appreciation rights,phantom stock, and restricted stock, primarily) are com-mon in most industrial and some developing countries.Only in the U.S., however, is there a widespread practiceof sharing this kind of ownershipbroadly with employees,mostly (but not entirely) in the technology sector (WholeFoodsandStarbucksalso do this, for instance). The taxrules for employee ownership vary widely from countryto country. Only a few, most notably the U.S., Ireland,and the UK, have significant tax laws to encourage broad-based employee ownership.[42] In India, employee stockoption plans are called ESOPs.[20]

The most celebrated (and studied) case of amultinationalcorporation based wholly on worker-ownership princi-

ples is theMondragon Cooperative Corporation.[43] Un-like in the United States, however, Spanish law requiresthat members of the Mondragon Corporation are regis-tered as self-employed. This differentiates co-operativeownership (in which self-employed owner-members eachhave one voting share, or shares are controlled by a co-

operative legal entity) from employee ownership (whereownership is typically held as a block of shares on be-half of employees using an Employee Benefit Trust,or company rules embed mechanisms for distributingshares to employees and ensuring they remain majorityshareholders).[44][45]

Different forms of employee ownership, and the princi-ples that underlie them,[46] are strongly associated withthe emergence of an internationalsocial enterprisemove-ment. Key agents of employee ownership, such asCo-operatives UKand the Employee Ownership Association(EOA), play an active role in promoting employee owner-

ship as a de factostandard for the development of socialenterprises.[47]

Other varieties of employee ownership include:

3.1 Direct purchase plans

Main article:Employee stock purchase plan

Direct purchase plans simply allow employees to buyshares in the company with their own, usually after-tax,

money. In the U.S. and several foreign countries, thereare special tax-qualified plans, however, that allow em-ployees to buy stock either at a discount or with matchingshares from the company. For instance, in the U.S., em-ployees can put aside after-tax pay over some period oftime (typically 612 months) then use the accumulatedfunds to buy shares at up to a 15% discount at either theprice at the time of purchase or the time when they startedputting aside the money, whichever is lower. In the U.K.employee purchases can be matched directly by the com-pany.

3.2 Stock options

Stock options give employees the right to buy a numberof shares at a price fixed at grant for a defined numberof years into the future. Options, and all the plans listedbelow, canbe given to any employee under whatever rulesthe company creates, with limited exceptions in variouscountries.

3.3 Restricted stock

Restricted stock and its close relative restricted stockunits give employees the right to acquire or receive shares,by gift or purchase, once certain restrictions, such as
https://en.wikipedia.org/wiki/Restricted_stockhttps://en.wikipedia.org/wiki/Employee_stock_purchase_planhttps://en.wikipedia.org/wiki/Co-operatives_UKhttps://en.wikipedia.org/wiki/Co-operatives_UKhttps://en.wikipedia.org/wiki/Social_enterprisehttps://en.wikipedia.org/wiki/Mondragon_Cooperative_Corporationhttps://en.wikipedia.org/wiki/Corporationhttps://en.wikipedia.org/wiki/Multinational_corporationhttps://en.wikipedia.org/wiki/Starbuckshttps://en.wikipedia.org/wiki/Whole_Foodshttps://en.wikipedia.org/wiki/Whole_Foodshttps://en.wikipedia.org/wiki/Stock_options


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working a certain number of years or meeting a perfor-mance target, are met.

3.4 Phantom stock

Phantom stock pays a future cashbonus equal to the valueof a certain number of shares.

3.5 Stock appreciation rights

Stock appreciation rights provide the right to the increasein the value of a designated numberof shares, usually paidin cash but occasionally settled in shares (this is called astocksettled SAR).

3.6 Cooperatives

Worker cooperativesare very different from the abovemechanisms. They require members to join. Eachworker-member buys a membership interest at a fixedprice, or buys a share. Only workers can be members, butcooperativescan hire non-worker-owners. Each membergets one vote.

4 See also

Labour law

Codetermination

List of employee-owned companies

Louis O. Kelso

Economics of participation

Timeline of Significant Events in ESOP Develop-ment

Center on Business and Poverty

5 References

Ron Kind, Erik Paulsen (2012), A model for soundretirement, Washington, DC

Alex Brill (2012), An Analysis of the Benefits SESOPs Provide the U.S. Economy and Workforce

(PDF)

Joseph Blasi, Douglas Kruse; Bernstein, Aaron(2003),In the company of owners: The Truth about

Stock Options (and why Every Employee ShouldHave Them), New York, NY: Basic Books,ISBN9780465007004,OCLC 50479205 63084526

Rosen, Corey; Case, John; Staubus, Martin (2005),Equity: Why Employee Ownership is Good for Busi-

ness, Boston, Mass.: Harvard BusinessSchool Press,ISBN 9781591393313,OCLC 57557579

Rosen, Corey, Understanding ESOPs, National

Center for Employee Ownership, Oakland, CA,2010, www.nceo.org

Curl, John (2009) For All The People: Uncover-ing the Hidden History of Cooperation, Coopera-

tive Movements, and Communalism in America, PMPress,ISBN 978-1-60486-072-6

Staubus, Martin (2011), Creating a High-Performing Workplace, Employee OwnershipInsights(The Beyster Institute) (Summer 2011)

Stumpff, Andrew W. (2009), Fifty Years ofUtopia: The Weird History of the Employee StockOwnership Plan,Tax Lawyer(Georgetown Univer-sity Law School/American Bar Association) (Win-ter 2009): 419432

Menke, John D.; Buxton, Dickson C. (2010),TheOrigin and History of the ESOP and Its Future Roleas a Business Succession Tool, Journal of FinancialService Professionals(Society of Financial ServiceProfessionals) (May 2010)

6 References

[1] A Pendleton, J McDonald, A Robinson and N Wilson,Employee Participation and Corporate Governance inEmployee-owned Firms (1996) 10(2) Work, Employ-ment and Society 205-226

[2] L Trewhitt, Employee Buyouts and Employee Involve-ment: A Case Study of Investigation of Employee Atti-tudes (2000) 31(5) Industrial Relations Journal 451, theway they vanished was nothing short of dramatic.

[3] Moulds, Josephine (27 June 2011). Co-operatives likeJohn Lewis thrive in uncertain times. The Daily Tele-graph(London).

[4] http://www.huffingtonpost.co.uk/david-laurie/john-lewis-economy_b_1954788.html

[5] Jha, Pushkar (25 September 2012).Is employee owner-ship the answer to our economic woes?". The Guardian(London).

[6] http://www.johnlewispartnership.co.uk/csr/our-employees/employee-ownership.html

[7] SeeJohn Lewis Partnership, Constitution

[8] http://www.project.nsearch.com/profiles/blogs/google-has-deleted-the-g8-venue

[9] http://www.conservatives.com/News/Speeches/2012/10/George_Osborne_Conference_2012.aspx
http://www.conservatives.com/News/Speeches/2012/10/George_Osborne_Conference_2012.aspxhttp://www.conservatives.com/News/Speeches/2012/10/George_Osborne_Conference_2012.aspxhttp://www.project.nsearch.com/profiles/blogs/google-has-deleted-the-g8-venuehttp://www.project.nsearch.com/profiles/blogs/google-has-deleted-the-g8-venuehttp://www.johnlewispartnership.co.uk/content/dam/cws/pdfs/about%2520us/our%2520constitution/john-lewis-partnership-constitution.pdfhttp://www.johnlewispartnership.co.uk/csr/our-employees/employee-ownership.htmlhttp://www.johnlewispartnership.co.uk/csr/our-employees/employee-ownership.htmlhttp://www.guardian.co.uk/sustainable-business/blog/employee-ownership-answer-economic-woeshttp://www.guardian.co.uk/sustainable-business/blog/employee-ownership-answer-economic-woeshttp://www.huffingtonpost.co.uk/david-laurie/john-lewis-economy_b_1954788.htmlhttp://www.huffingtonpost.co.uk/david-laurie/john-lewis-economy_b_1954788.htmlhttp://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/8599868/Co-operatives-like-John-Lewis-thrive-in-uncertain-times.htmlhttp://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/8599868/Co-operatives-like-John-Lewis-thrive-in-uncertain-times.htmlhttp://www.menke.com/blog/the-origin-and-history-of-the-esop-and-its-future-role-as-a-business-succession-tool/http://www.menke.com/blog/the-origin-and-history-of-the-esop-and-its-future-role-as-a-business-succession-tool/http://www.menke.com/blog/the-origin-and-history-of-the-esop-and-its-future-role-as-a-business-succession-tool/http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1624386http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1624386http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1624386http://rady.ucsd.edu/beyster/media/newsletter/2011/summer/high-performance.htmlhttp://rady.ucsd.edu/beyster/media/newsletter/2011/summer/high-performance.htmlhttps://en.wikipedia.org/wiki/Special:BookSources/9781604860726https://www.worldcat.org/oclc/57557579https://en.wikipedia.org/wiki/OCLChttps://en.wikipedia.org/wiki/Special:BookSources/9781591393313https://en.wikipedia.org/wiki/International_Standard_Book_Numberhttps://www.worldcat.org/oclc/50479205+63084526https://en.wikipedia.org/wiki/OCLChttps://en.wikipedia.org/wiki/Special:BookSources/9780465007004https://en.wikipedia.org/wiki/International_Standard_Book_Numberhttp://esca.us/images/stories/Brill_S_ESOP_Study_2012.pdfhttp://esca.us/images/stories/Brill_S_ESOP_Study_2012.pdfhttp://thehill.com/blogs/congress-blog/economy-a-budget/241371-a-model-for-saving-for-a-sound-retirementhttp://thehill.com/blogs/congress-blog/economy-a-budget/241371-a-model-for-saving-for-a-sound-retirementhttps://en.wikipedia.org/wiki/Center_on_Business_and_Povertyhttps://en.wikipedia.org/wiki/Timeline_of_Significant_Events_in_ESOP_Developmenthttps://en.wikipedia.org/wiki/Timeline_of_Significant_Events_in_ESOP_Developmenthttps://en.wikipedia.org/wiki/Economics_of_participationhttps://en.wikipedia.org/wiki/Louis_O._Kelsohttps://en.wikipedia.org/wiki/List_of_employee-owned_companieshttps://en.wikipedia.org/wiki/Codeterminationhttps://en.wikipedia.org/wiki/Labour_lawhttps://en.wikipedia.org/wiki/Cooperativehttps://en.wikipedia.org/wiki/Worker_cooperativehttps://en.wikipedia.org/wiki/Phantom_stock


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6 6 REFERENCES

[10] http://www.bis.gov.uk/assets/biscore/employment-matters/docs/c/12-1215-consultation-on-implementing-employee-owner-status.pdf

[11] https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/68731/

12-1338-implementing-employee-owner-status-government-response.pdf

[12] Elizabeth Rigby (28 June 2013).Chancellors 'shares forrights plan flops.ft.com. Retrieved 1 July 2013.

[13] Labour calls for Agricultural Wages Board notto be abol-ished. BBC News. 24 April 2013.

[14] Tim Wigmore (1 July 2013). The flop of shares-for-rights shows Osborne at his worst. London:http://blogs.telegraph.co.uk/. Retrieved 1 July 2013.

[15] Ludwig, Ronald. Conversion of Existing Plans to Em-ployee Stock Ownership Plans(PDF).American Univer-sity Law Review26. Retrieved 4 September 2013.

[16] Miller, Scott (March 2010). The ESOP Exit Strategy.Journal of Accountancy. Retrieved 4 September 2013.

[17] http://www.dol.gov/ebsa/faqs/faq_compliance_pension.htmlUSDOL

[18] Gimein, Mark; L. Lavelle; A. Barrett (2 April 2006).The Bottom Line On Options. Business Week. Re-trieved 3 September 2013.

[19] http://articles.chicagotribune.com/2002-09-08/business/0209080316_1_employee-ownership-ual-unions

ChicagoT[20] ESOP (Employee Stock Ownership Plan) Facts.

[21] S CorpESOP Legislation Benefits and Costs: Public Pol-icy and Tax Analysis.Freeman, Steven F. and MichaelKnoll. 29 July 2008.

[22] Louis O. Kelso, Who Advocated Worker-Capitalism, IsDead at 77. New York Times. 21 February 1991.

[23] Russell B. Long, 84, Senator Who Influenced Tax Laws.The New York Times. 11 May 2003.

[24] Mighty Kelso: His Brainchild is idea whose time hascome. Barrons. 21 July 1975.

[25] Economic Growth and Tax Relief Reconciliation Act of2001.Public Law 107-16. 7 June 2001.

[26] Leveraged ESOP. Financial Dictionary.

[27] Resilience and Retirement Security: Performance ofS ESOP Firms in the Recession. Swagel, Phillip andRobert Carroll. 10 March 2010

[28] Anderson, Sean M (2009).Risky Retirement Business:How ESOPs Harm the Workers They Are Supposed toHelp(PDF).Loyola University Chicago Law Journal41:2728. Retrieved 3 September 2013.

[29] Shlomo Benartzi, et al., The Law and Economics ofCompany Stock in 401(k) Plans, 50 Journal of Law &Economy, 45, 57 (2007)

[30] S Corporations Lead Way on Jobs, Report Says Brill,Alex. 26 July 2012.

[31] Macroeconomic Impact of S ESOPs on the U.S. Econ-omyBrill, Alex. 17 April 2013.

[32] Paton, R. (1989) Reluctant Entrepreneurs, London: SagePublications.

[33] See also Chris Doucouliagos, Worker participation andproductivity in labor-managed and participatory capitalistfirms: A Meta-Analysis, Industrial and Labor RelationsReview, Vol. 49, No. 1, Oct., 1995.

[34] Gates, J. (1998) The Ownership Solution, London: Pen-guin.

[35] Blais, J., Freeman, R., Kruse, D. (2010), Shared Capital-ism and Work However, NBER Publications.

[36] Rosen, C., Case, J., Staubus, M., (2005)Equity: Why Em-ployee Ownership Is Good for America, Harvard BusinessSchool Press.

[37] Cornforth, C. (1988) Developing Successful Worker Co-ops, London: Sage Publications.

[38] Andrew Stumpff andNorman Stein, Repeal Tax Incentivesfor ESOPS,125 Tax Notes 337, 339-40 (2009);

[39] Brett McDonnell, ESOPs Failures: Fiduciary Duties WhenManagers of Employee-Owned Companies Vote to En-

trench Themselves,2000 Colum. Bus. L. Rev. 199, 235(2000).

[40] "SustainingEmployee Ownership for the LongTerm: TheChallenge of the Mature ESOP Company"

[41] Internal Revenue Code section 1042.

[42] National Center for Employee Ownership, EmployeeOwnership for Multinational Companies, 2010

[43] Whyte, W. F. and Whyte, K. K. (1991) Making Mon-dragon, New York: ILR Press/Itchaca.

[44] Ridley-Duff, R. J. (2009) Cooperative Social Enter-prises: Company Rules, Access to Finance and Manage-ment Practice,Social Enterprise Journal, 5(1), forthcom-ing.

[45] Erdal, D. (2008) Local Heroes: How Loch Fyne OystersEmbraced Employee Ownership and Business Success,London: Viking.

[46] Ridley-Duff, R. J. (2007) Communitarian Perspectiveson Social Enterprise, Corporate Governance: An Inter-national Review, 15(2):382-392.

[47] Ridley-Duff, R. J. (2008) Social Enterprise as a So-cially Rational Business,International Journal of En-trepreneurial Behaviour and Research, 14(5):291-312.
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7

7 External links

The National Center for Employee Ownership

Beyster Institute

Center on Business and Poverty Foundation for Enterprise Development

The ESOP Association

Rutgers School of Management andLabor Relations

CSG Partners
http://www.csgpartners.com/services/esop/index.phphttp://smlr.rutgers.edu/http://www.esopassociation.org/http://www.fed.org/http://www.cobap.org/http://rady.ucsd.edu/beyster/http://www.nceo.org/


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8 8 TEXT AND IMAGE SOURCES, CONTRIBUTORS, AND LICENSES

8 Text and image sources, contributors, and licenses

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Employee stock ownership plan Source: https://en.wikipedia.org/wiki/Employee_stock_ownership_plan?oldid=670444200 Contribu-tors:DavidLevinson, Edward, Egil, Jengod, Nurg, JamesMLane, Mike R, AlexChurchill, Fenevad, Wikidea, Mattley, Kurieeto, DreamGuy,Dr Gangrene, Boothy443, Woohookitty, Lapsed Pacifist, Toussaint, FreplySpang, Millueradfa, Reactor, The wub, Thekohser, Ground Zero,CarolGray, Zotel, ShadowHntr,Hairy Dude,RussBot,Akamad, Member,Big Brother 1984, Nirvana2013,Clearedas filed, Haemo, Closed-mouth, Femmina, CWenger, Jmchuff, Veinor, SmackBot, McGeddon, Thumperward, Rhollenton, Thisisbossi, Alx xlA, Completesen-tence, Iskatel~enwiki, Richard001, Arielco, Gobonobo, Beetstra, CmdrObot, Penbat, Krobertson, Cydebot, Omicronpersei8, Dubc0724,Jimhockin, Fayenatic london, Yellowdesk, Dougher, Hroulf, Jozef.sovcik, Inhumandecency, R'n'B, Adavidb, Bizzwriter, AntiSpamBot,DMCer, Nail56, StuckySkills, Harikrishnan04, Sesadvisors, The Red Hat of Pat Ferrick, Malcolmxl5, Stananson, Rodney Shakespeare,Mr. Granger, Casp7, 7&6=thirteen, Roryridleyduff, EastTN, Asydor, Addbot, Cantaloupe2, , Luckas-bot, Yobot, SouthBay, Eumolpo, Omnipaedista, FrescoBot, Haeinous, I dream of horses, Diomedea Exulans, Jonesey95, MastiBot, Workdemo, Cooper-ate23, Vrenator, RjwilmsiBot, Beyond My Ken, EmausBot, Dewritech, GoingBatty, Ponydepression, Jgmenke, Finwriter, Chuispaston-Bot, ClueBot NG, Muhammad Ali Khalid, BG19bot, Rockeykheeda, Kndimov, Katfish2011, Fairlyoddparents1234, AdventurousSquirrel,Debra.lewis, Seanimal, Mylesbaker, UseTheCommandLine, Indiacp, Guest383, Halleydodge123, LudicrousTripe, Professor Wonderful,Blistix12, Monkbot, Agm1711 and Anonymous: 100

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