Updated ESOP Statistics

The Statistical Profile of Employee Ownership was updated in February 2009. The estimating techniques have been revised to create a more accurate estimate of the number of plans:

Using Innovation and Employee Ownership to Achieve Continuous Success, Diversify Lines of Business, Retain Employees, and Address Succession Planning Objectives

The August 14, 2008 Employee Ownership Update is online and discusses the following:

Updated List of Largest Majority Employee-Owned Companies

The NCEO’s The Employee Ownership 100 has been updated and is now online:

ESOP Sustainability

We have spent some time examining Why the Number of ESOPs is not Growing at a Faster Rate. One of the major components of the number of ESOPs is the ESOP termination rate. The second phase of a recent ESOP Plan Termination study found that less than 2% of ESOP companies terminated their ESOP each year. While a common perception is that the repurchase obligation is the primary reason for ESOP termination, the study found that over half of the ESOP terminations are a result of receiving an attractive offer the company could not turn down, even though they could handle the repurchase obligation. Other reasons included the aforementioned repurchase obligation, dissatisfaction with the ESOP, and financial difficulties of the company.

Bear Stearns, High Concentrations of Employer Stock, Statistics: Company Stock in 401(k) Plans

The Week That Shook Wall Street: Inside the Demise of Bear Stearns discusses the details behind the sale of Bear Stearns to J.P. Morgan Chase & Co. Since it is estimated that about 30% of Bear Stearns were employee owned, the issue of being Too Concentrated in Employer Stock is again being revisited. The Job/Stock Double Whammy discusses how employees that are heavily invested in employer stock are at risk of losing their jobs and their savings. It mentions how owning company stock was a part of their culture, as well as for Lehman Brothers Holdings Inc. and Merrill Lynch & Co., who reportedly are each more than 25% employee owned. The article also contains comparisons to Enron and Lucent.

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