Pallak Seth, Group CEO of PDS Multinational Fashions, is contemplating options to bring better collaboration across his global apparel supply chain platform. PDS, a group of 50-plus subsidiary companies, each led by its own CEO and with different apparel industry specialties, has grown rapidly over the past decade, yet the industry is increasingly competitive and … Read More
This mini-case study examines S&C Electric Company, the storied Chicago-based employee-owned company that was founded in 1911. The mini-case study introduces the company’s history and describes how employee ownership preserved the company and its jobs during a key generational transition.
At Max Auto Supply Co., a Toledo-based chain of 113 automotive repair stores, CEO Randy Katz’s main motivation for adopting an ESOP was “to cash out family owners and avoid estate tax.” It also “felt like the right thing to do” for the company’s employees, most of whom are mechanics and technicians.
This mini-case study examines ComSonics, which first adopted an Employee Stock Ownership Plan (ESOP) in 1975, introducing its culture and its unusual Employee Advisory Committee.
This mini-case study examines employee share ownership at National Van Lines, where an Employee Stock Ownership Plan (ESOP) provided a family-run business a succession plan that ensured the continuation of the company and protected employee jobs. Just one-third of family businesses successfully transition from the first to the second generation of ownership and only 12% … Read More
This case study examines employee share ownership at Central States Manufacturing, where the employee stock ownership plan (ESOP) shares stunning sums of wealth with employees. Central States designs its ESOP to allow participants to access a portion of their ownership wealth while they are still employed at the company, through hardship and service withdrawals. This … Read More
This case study examines employee share ownership at North State Grocery, where the Employee Stock Ownership Plan (ESOP) solved a transition challenge in a company owned by two siblings. Thanks to the ESOP, long-term employees, including frontline staff such as cashiers and bakery workers, build a larger cushion of retirement savings than is typical in … Read More
This case study examines employee share ownership at Parksite, Inc., where the employee stock ownership plan (ESOP) is paired with a strong company culture and high job quality. For the company’s co-founders, the ESOP provided a solution to a major transition challenge. The company’s long-term employees accumulate considerable stock wealth through the ESOP. Discussion questions … Read More
This ASPPA certificate course develops concepts for an administrator to better understand ESOPs and the intricacies of plan administration for ESOPs. It is specifically designed for administrators and candidates transitioning into intermediate ESOP areas. All ASPPA examination and educational materials are copyrighted. No examination or educational materials can be copied, reproduced or shared in any … Read More
Laws in many countries mandate paying men and women equally when in similar jobs. Such laws, coupled with considerable organizational efforts, lead some scholars to contend that within-job pay inequality is no longer a source of the gender pay gap. This article argues important differences in a widely used form of pay heretofore overlooked in … Read More
Olivia Nash, an analyst at leading hedge fund BlueShark Capital Management, had just finished listening to the hour-long earnings call for Twitter’s Q4 2017 results. Was Twitter doing well? That depended on which numbers she chose to believe. According to Generally Accepted Accounting Principles (GAAP), Twitter had recorded a $108M net loss for 2017. But … Read More
This technical note explores the many different forms of equity compensation. Equity compensation, defined as compensation that provides for the delivery of equity securities, aligns employees’ incentives with shareholder value driven by a company’s stock price. Equity compensation is used extensively to attract and retain key employees. However, the types of equity compensation differ in … Read More
Purpose The purpose of this paper is to investigate the additive and differential effects of short-term-oriented group incentives (STOGIs) and long-term-oriented group incentives (LTOGIs) on psychological ownership and organizational commitment. Design/methodology/approach This study analyzed data from 17,255 US employees in the 2005 data set of the National Bureau of Economic Research Shared Capitalism Research. Findings … Read More
The aim of this paper is to compute and describe the conditions of an optimal employee ownership contract between an employer and an ambiguity‐averse employee. We then introduce ambiguity aversion in the baseline model of Aubert et al. (2014) using the multiple prior preferences of Gilboa and Schmeidler (1989) and its extension proposed by Maccheroni … Read More
Why a low-cost program to educate employees about company ownership could produce huge financial benefits for the country.
The “ESOP-Owned S corporation” structure offers truly remarkable advantages that can transform a business into a tax-exempt, for-profit entity. An S corporation whose stock is held in an ESOP, of course, pays no federal income tax (and little or no state income tax) at the corporate level…
This article analyses the linkages among group incentive methods of compensation (broad‐based employee ownership, profit sharing and stock options), labour practices, worker assessments of workplace culture, turnover and firm performance in firms that applied to the ‘100 Best Companies to Work For in America’ competition from 2005 to 2007. Although employers with good labour practices … Read More
In this paper, we first examine whether Huawei has an advantage over ZTE following the strategic restructurings in 2011, and then retest the hypothesis on the positive effect of an ESOP on Huawei’s competitive position…
The Wawa associates have an ESOP which plays a key role in Wawa’s culture of ownership. This case explores the role of incentives and levers of control to create a successful retail chain.
Employee ownership is often used not only as a reward management tool but also as an entrenchment mechanism. The literature suggests that good managers use employee ownership as a reward management tool, whereas bad managers implement it for entrenchment, thus suggesting the existence of an equilibrium level of employee ownership. The contributions of this paper … Read More
While intuition suggests that empowering workers to have some say in the control of the firm is likely to have beneficial effects, empirical evidence of such effects is hard to come by because of numerous confounding factors in the naturally occurring data. We report evidence from a real‐effort experiment confirming that worker performance is sensitive … Read More
After several postponements, 401(k) fee disclosure was mandated by the Department of Labor (DOL) before July 1st of 2012. So what kind of impact have we seen in the ESOP world? Has it been successful in helping plan sponsors and participants understand the costs of their 401(k) plans?
In 1964, the famous television bandleader Lawrence Welk went for a drive in the country north of San Diego, Calif. planning to invest in a grove of orange trees. Instead he bought a motel and a nine-hole golf course. One of the keys to their business success has been their philosophy of treating their employees like family…
If owners of businesses are reaping the rewards of economic growth at the expense of workers, then why not just try to increase the number of workers who also own a piece of the firms that employ them?
This note discusses the complex topic of motivation, including the issue of contingent compensation…