OEOC

The Ohio Employee Ownership Center

Category Archives: Employee Ownership News

Bipartisan Bill Introduced in Support of Employee Ownership (S. 742)

On April 17, Senator Ben Cardin (D-MD) and Senator Pat Roberts (R-KS) introduced bipartisan legislation based on a survey released by the Employee Benefit Research Institute stating that 28% of Americans worry that they won’t have enough money to retire. According to Cardin and Roberts, Employee Ownership offers a sound solution to this problem.

Far too many Americans are inadequately prepared for retirement. Our legislation is about helping workers save by giving businesses the tools they need to create jobs and promote adequate retirement savings.  It will strengthen a structure that promotes employee-ownership and helps workers build secure retirements…
-Senator Ben Cardin

Alex Brill of the American Enterprise Institute and CEO of Matrix Global Advisors, argues that employee stock ownership plans have higher productivity and resilience. The bill introduced by Roberts and Cardin would encourage the formation of S-Corp ESOPs, because this type of ESOP has been particularly successful in terms of longevity, wages, and growth.

S ESOPs have also proven more resilient in the face of economic distress, outperforming other private U.S. employers during the recent recession.
-Alex Brill

Among the positive impacts of an S ESOP according to Brill are $77 billion in labor income, $246 billion in output, and $27 billion in tax revenue from 1.4 million jobs. More details on the Brill’s research can be found in his study, Macroeconimic Impact of S ESOPs on the U.S. Economy.

More information on the proposed bill, Promotion and Expansion of Private Employee Ownership Act of 2013 (S. 742):

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Center for American Progress Calls for Inclusive Capitalism

Growing the Wealth: How Government Encourages Broad-Based Inclusive Capitalism, a report recently released by the Center for American Progress shows that inclusive capitalism, defined as “…granting workers ownership stakes in the company or a share of its profit based on workers’  collective performance…” has helped companies grown in the U.S.

Inclusive capitalism, when partnered with democratic workplace practices, has a proven record of helping workers and businesses alike in a myriad of ways.

ESOPs are an effective means of rewarding employees and generating wealth and are included in the report;

Douglas Kruse, professor and director of the doctoral program in industrial relations and human resources at Rutgers University, found that productivity improved by 4 percent to 5 percent on average in the year of ESOP adoption and continues after adoption, more than doubling the rate of annual productivity growth of the U.S. economy over the past 20 years.

The report combines basic knwoledge about inclusive capitalism including the types that are currently practiced as well as information on existing and historic legislation and the political landscape of broad-based capital-sharing programs.

For more information, and to download the full pdf of the study, see the Center for American Progress webpage.

Interview with Graeme Nuttall on the Applications of Employee Ownership

Angela Perry the Chair of Employee Ownership Australia & New Zealand interviewed Graeme Nuttall, expert in Employee Ownership; partner at Field Fisher Waterhouse, UK; and author of Sharing Success: the Nuttall Review.

Topics include:

  • Key barriers to employee ownership in the UK
  • Essential elements tosuccessful employee ownership
  • The connection between employee engagement and employee ownership
  • Importance of employee ownership in succession planning and saving companies
  • Driving productivity and innovation
  • Importance of employee ownership for small to medium enterprises and start-up businesses
  • The global application of the developments in the UK

Watch the full video . . .

Announcing the OEOC’s 27th Annual Employee Ownership Conference-April 19, 2013

Employee Ownership: Building Jobs, Wealth, & Communities

The 27th Annual Ohio Employee Ownership Conference

April 19th, 2013, Akron Fairlawn Hilton

Featured speakers for the event will include:

Corey Rosen
Co-Founder and Senior Staff Member of The National Center for Employee Ownership

Rosen co-authored, along with John Case and Martin Staubus, Equity: Why Employee Ownership Is Good for Business (Harvard Business School Press, May 2005). Over the years, he has written, edited, or contributed to dozens of books, articles and research papers on employee ownership. He is generally regarded as the leading expert on employee ownership in the world.

and

J. Michael Keeling, CAE
President of The ESOP Association

Since assuming his position in April 1991, the Association has experienced strong growth in membership and revenues, and is the largest organization in America dedicated to ensuring employee-owned companies are effective in operating their ESOP in an environment of ownership.

Studies have showed that Employee Ownership is an effective means to building more jobs, increasing local wealth, and creating stronger communities.

Topics at the conference will include:

  • Fundamentals of Ownership for Employee Owners
  • Building an Ownership Culture – Teams, Communication, and more
  • ESOP Technical Issues: Fiduciary Issues, Legal Update, Valuation, and more
  • Selling to Your Employees Through an Employee Stock Ownership Plan (ESOP) or a Cooperative
  • Community Development Strategies and Employee Ownership

And, don’t forget our Pre-Conference on Thursday, April 18 … A chance to share and learn!

More information and updates on the conference can be found on our 27th Annual Ohio Employee Ownership Conference page.

Contact us for additional info or to register at oeoc@kent.edu or 330–672-3028.
And, there’s still time to become a conference sponsor, contact Kelley Fitts at kfitts@kent.edu or 330-672-0336.

Cooperative Organic Farming Benefiting Ohio Family Farmers

Family farmers in Ohio are turning to organic cooperatives to stabalize finances and to grow more stable businesses. 

According to an article submitted to the Public News Service, “[t]he organic industry is expanding . . . with almost 20 percent growth every year.” The cooperative allows farmers to focus on day-to-day activities and appeal to consumers concerned about food quality. 

George Siemon, CEO of Organic Valley, the brand associated with the largest organic farming cooperative in North America will be speaking on the future of organic agriculture and the benefits of the co-op on February 16 at the Ohio Ecological Food and Farm Associations’ conference in Granville, OH. 

More information is available at the OEFFA Conference website.

New Microloan Program from USDA to Help Minority, Socially Disadvantaged, and Beginning Farmers

According to The Dispatch, the U.S. Department of Agriculture recently announced a new microloan program to “help small and family operations, beginning and socially disadvantaged farmers secure loans under $35,000.”

The goal is to help producers through their first years with resources and increased equity so that these farmers can eventually qualify for commercial credit. Producers can apply for a maximum of $35,000 with an interest rate for the microloan currently at 1.25 percent charged monthly by contacting their local Farm Service Agency Office.

Employee-Ownership in Fortune’s "100 Best Companies to Work For"

Last week, Fortune Magazine released their 2013 list of the “100 Best Companies to Work For.” Among those recognized in the list were employee-owned companies like Burns & McDonnell, Publix Super Markets and CH2M Hill. The magazine bases the list and rankings on factors such as the companies’ commitments to employee wellness, community outreach, professional and leadership development, and diversity.

Burns & McDonnell

Based in Kansas City, Burns & McDonnell engineering firm ranked 18 this year, up from the 26 spot last year. Employees bought the company from Armco Steel in 1986, and the Kansas City location now has 2,200 employee owners.

Publix Super Markets

Since George W. Jenkins founded Publix Super Markets in 1930 in Winter Haven Florida, the company has grown to become the largest employee-owned supermarket chain in the United States. The company ranked 77 on the list for 2013, up one spot from 78 last year.

CH2M Hill

After not making the top 100 last year, he civil engineering and construction firm, CH2M HILL, returned to the list this year, ranking 100. The Englewood, Colorado-based company is 100% employee owned.

Other employee-owned companies on the list:

Can ESOPs Provide Better Outlook for Construction & Engineering Industry?

According to a recent statement from Verit Advisors (C&E Industry Outlook and Company Valuation), employee ownership may be a valuable tool for driving C&E companies during this uncertain time for the industry. Although the industry outlook predicts an increase in infrastructure growth, there are a number of factors stacked against companies in construction and engineering.

Rob Ruszkowski, currently vice president at Verit Advisors, has a background in chemical engineering at S&C Electric Company in Chicago, an ESOP company. He knows first hand how insentives like employee stock ownership plans can drive performance, increase equity, and attract and retain employees.

The article states:

“C&E companies are driving value different ways. Many of the top performing companies have significant employee ownership in the form of options, direct ownership, stock appreciation rights and employee stock ownership plans (ESOPs).”

The National Center for Employee Ownership lists “The Employee Ownership 100: America’s Largest Majority Employee-Owned Companies,” and more than a quarter of the companies fall within construction and engineering, some of which are 100% employee-owned.

Engineering consulting firm, Boucher & James Inc, headquartered in Doylestown, PA recently saw the benefits of converting to an ESOP and announced their new corporate structure on PhillyBurbs.com.

The Bluebook Building and Construction Network, a publishing company specializing in contractor and project information for commercial construction also recently converted to an ESOP to celebrate the company’s 100th anniversary. According to the article at TMC News, an ESOP was attractive to the business because it would “ensure it would live on with the people who helped build it.”

“The Blue Book Network employees now own the company and the ESOP enables them to control their own destiny. With the investment of a little hard work and an unbeatable team of employees, the ESOP will help steer The Blue Book Building and Construction Network into the future!” -Blue Book Network President, Richard Johnson

Casino Queen Becomes Employee-Owned

Casino Queen opened on the East St. Louis riverfront in 1993–the first casino in the core of the region–and was recently bought through an employee stock ownership plan for $170 million. 

Jeff Watson, the Casino Queen’s general manager and president will help manage the ESOP as a trustee. Watson believes his business is the first ESOP casino in the country and the new system will benefit the employees as well as the company, which has been struggling with increased competition and the weakened economy. 

To learn more about this transaction, read the full story in the St. Louis Post-Dispatch.

The benefits of ESOPs are also making prominant headlines. According to a December 28th article in Forbes, “Employees Quietly Emerge as New Force in Buyouts,” experts are expecting more Employee Stock Ownership Plans to buy companies in the coming year. Not only does the ESOP offer tax advantage, layoffs are less likely, and there’s less risk of defaulting on acquisition debt, making it an attractive strategy for retirees looking to sell their business.

Read more on this topic:

Austin Cooperative Summit organized by NCBA and the Austin Cooperative Think Tank (Jan 2013)

The National Cooperative Business Association and the Austin Cooperative Think Tank have announced a Cooperative Summit at The University of Texas at Austin to “facilitate the exchange of best practices and cross-sector learning among cooperators and to strengthen the local cooperative community.”

Benefits of Attending

  • Share common best practices and innovative approaches on key issues
  • Identify challenges and opportunities that exist in the co-op community
  • Develop relationships and network with cooperative leaders across sectors

Who Should Attend

  • Cooperative leaders, board members, staff and supporters
  • Regional representatives from all co-op sectors
  • All those interested in learning about the cooperative business model

Friday, January 25
Reception/Exhibit Showcase & Introductory Panel
Vuka Co-op
7 – 10 pm

Saturday, January 26
Cooperative Summit
The University of Texas at Austin
8 am – 7 pm

Registration & More Information