The Value of ESOPs in Engineering Firms
While all kinds of businesses become employee stock ownership plan (ESOP) companies, there is a large percentage of engineering firms that have chosen the ESOP structure. Why so?
California Center for Employee Ownership Update: CCEO Comes Online
Last May, we introduced you to a new effort aimed at spreading the word about employee ownership at local and regional levels throughout the country. Building on pioneering efforts in Ohio and Vermont, the idea of proliferating state centers throughout the U. S. was initiated by the National Center for Employee Ownership (NCEO)…
J. Robert Beyster Papers: A Legacy of Employee-Owners’ Journey for Innovation
In December, my family finalized a very personal, and we hope impactful, gift titled, J.R. Beyster Papers, to UCSD Library’s Special Collections. After about one year of pre-processing, the collection includes more than 200 boxes of documents covering more than 50 years of hundreds of advanced scientific innovations, small- to billion-dollar business experiments, and discontinued to transformational government program development.
The 100 Percent ESOP-Owned S Corporation
When structured and maintained properly, the 100 percent ESOP-owned S Corporation can be a powerful force of employee ownership…
Trust, Information, Belief in People—the Keys to Best Cultures
My contention is that the most successful companies are built on mutual trust, honest information, and a belief in people rather than on new, top-down, more for less, processes that increase worker output in order to satisfy customers…
Does an ESOP Make Sense? Craft Beer’s Growth and Consolidation
The consolidation and sale of some beloved brands to Big Beer has raised eyebrows and piqued new questions about the industry’s identity. The good news is the industry is still expanding with more than 4,000 U.S. craft breweries, over 100 in San Diego alone, and there is an opportunity for employee stock ownership plans (ESOPs) to play a larger role in the industry’s future.
Looking for Mr. GoodTrustee
The purpose of this brief article is to suggest an interview script that reflects a list of areas that an ESOP company should want to understand completely before handing over this extremely important role to an outsider…
The Benefits of an ESOP for Corporate Transition Strategies
Like many ESOPs, the Macfadden Employee Stock Ownership Plan was established as a means of transitioning ownership from the company’s founder to its employees. Just over 12 years later, the Macfadden ESOP now owns 100 percent of the company…
Sustainability in the 21st Century
For the last several years, there has been a constant and very predictable discussion taking place regarding the sustainability of ESOP companies…
Section 1042: A Guide to Floating Rate Notes
Floating rate notes (FRNs) are bonds that have a variable coupon that is pegged to a reference rate, typically LIBOR, plus a fixed spread. There are several variations of FRNs, but this article will focus on those utilized to fulfill IRC Section 1042 requirements.
Why Are ESOPs Prevalent in Manufacturing and Construction Industries?
Two of the most common industries to have established ESOPs are construction and manufacturing, combining to make up 35 percent of the 1,600 companies represented by the ESOP Association…
ESOP and a New Wave of Local Awareness
By taking the great example of regional ESOP promotion pioneers, engaging the University of California in the effort and working to engage other educational institutions as well as leaders in business and the local employee ownership community, we believe that it will be very possible to build strong regional support for the idea that communities ought to be the most active supporters of employee ownership…
Dependency, Poverty and Employee Ownership
In today’s economy, some employees live paycheck to paycheck and are unable to save for a rainy day, let alone retirement. However, an increasingly utilized business model may yield part of the solution. Employee Stock Ownership Plans (ESOPs) are a promising alternative to traditional business models…
J. Robert Beyster’s Spirit Lives On
In 1986, Dr. Beyster created the Foundation for Enterprise Development (FED) to assist companies and individuals who were interested in furthering the concept of employee ownership, a core principle of Dr. Beyster’s entrepreneurial philosophy…
The Fiduciary Trustee’s Role in ESOP Governance
In this issue, we close the loop on the triangular governance structure that supports ESOP companies and discuss the role of the ESOP itself as reflected in the duties and functions of the ESOP fiduciary (the trustee).
Deck the Malls!
A tale of entrepreneurship – and a leading holiday decoration company becomes employee owned…
Opinion: Looking for the Perfect Buyer?
With all the news about company bankruptcies, increased government regulations, higher equipment costs and economic uncertainty, some motor-carrier owners are looking for options…
Don’t Wait for a Crisis, Fix it Now
When things go wrong at work, as they occasionally do, a common first reaction is to look for the culprit(s). This can lead to punishment which may result in the ‘evildoer(s)’ being severely reprimanded, or even terminated. Unfortunately, not only does the problem often remain unsolved, the organization is left with another challenge of replacing a person or two. There may be a better way that doesn’t result in a lose-lose situation…
Requirement, Guidance, Advice and Implication: A Brief Look at a Couple of Recent ESOP Legal Events
Several recent legal events have given the ESOP community a great deal to consider…
Shared Capitalism: Lessons from the 6th Annual Beyster Summer Fellowship Symposium
What are the best strategies for aligning equity incentives for all stakeholders, and what lessons can be drawn from cutting-edge research in the area?
The Role of Management in an Employee-Ownership Company
What is the function of senior management in the governance of ESOP companies? Simply put, the function of management in an ESOP company is the same as in any other company – to manage very well to achieve strategic objectives and to participate in the strategic operation of the company by giving the board feedback on how the strategic plan is being successfully implemented and, more important, where it is failing.
How Do I Get More Employees to Actively Participate in Our Plan?
You just received the dreaded call from your friendly 401(k) third-party administrator – your average deferral percentage (ADP) test is failing…again! Some of your highly compensated employees will be disappointed to learn that money they deferred will be returned to them and is taxable.
ESOP Governance Collaborators: The Board of Directors
Many closely held company boards only meet in the virtual world of corporate counsel’s template minutes and perform their important functions without much more thought than what is required to make a signature. In ESOP-owned companies (or any structure that provides for broad ownership among employees of the company) the landscape changes, and the independent role of the board of directors as well as its oversight function become significantly more important.
The Benefits of Outside Directors in ESOP Companies
Selling a business to an ESOP often requires significant changes to the company’s governance structure. If your board of directors has consisted solely of family members, or close friends, you may not welcome this change, but outside directors can help you run the business more judiciously and effectively…
“We The Owners” Film Garners Awards, Attention and National Distribution
Most people know either first-hand or through someone close to them what it feels like to not be valued, to not have a say, to not have control, or to be demotivated at work. A feel-good movie about three companies – New Belgium Brewery, Namasté Solar, and DPR Construction – that strive for the opposite is a welcome relief.