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Employee stock ownership plans (ESOPs) significantly increase management's control in hostile takeovers. A 1989 court decision in favor of Polaroid Corp. to increase its holdings in the ESOP allowed the firm to repulse the takeover attempts of Shamrock. This ruling enhanced the antitakeover nature of ESOPs, but resulted in a negative market response. These results suggest that firm value has a non-monotonic relationship with managerial wonership, and that ESOPs have positive effects on wealth.

Issues concerning the economics of employee stock ownership plans are examined, focusing on the economic disadvantages. Topics include the relatively small motivation they offer to employees of large corporations to increase productivity, the risk of investing a large portion of assets in one entity, and the dangers inviting insider trading and stock manipulation by top corporate executives.

ON THE face of it, the boardroom seems a promising place for pinning down the identity of a company's owners. The directors oversee the firm's activities. They appoint its top [...]

Offering staff a means of investing in their company has many benefits. It offers staff a means of long-term saving outside the traditional pensions market, and is more flexible given [...]

Seeking a more consistent method to promote an environment of shared ownership, Jim Martin, owner of James Martin Associates, Inc. in Vernon Hills, IL, decided to motivate and reward them [...]

Taxable gains realised on pure investments held for a short period will be taxed at 40%. This rate reduces after the assets have been held for three full years but [...]

Participants in corporate defined contribution plans have, on average, 36% of their assets invested in the stocks of their employers. But many such allocations to employer stock are far higher. [...]

HSBC EMPLOYEES received 37 million shares worth 325 million [pounds sterling] when their save-as-you-earn scheme (SAYE) matured a month ago. Over 14,000 of HSBC's 40,000 UK employees took part in [...]

Share plans are an increasingly important way of keeping good staff. 'Offering employees shares in their company makes business sense,' says Stephen Turley, director of compensation and benefits at Reckitt [...]

Benefits to Business Owners Selling by ESOP * Flexibility: Equity holders (sellers) can sell any portion of their ownership to the ESOP and simultaneously sell or gift any portion of [...]

The article discusses the good and bad aspects of companies issuing stocks to match employee contributions to 401(k) plans.

Employee stock ownership plans (ESOPs) are operating in more than 10,000 businesses which actively involve over 10,000,000 employees. ESOPs allot workers capital ownership in a company and enhance company performance. As an employee benefit, ESOPs give workers from one percent to 100% of a company's ownership. Occasionally ESOPs are used to prevent hostile takeovers or save failing companies, but more frequently ESOPs are used as a tax benefit to the company and as a financial benefit to employees. However, in public companies, ESOPs frequently replace other benefits packages which already exist. Employees control their own shares and have a say in company policy and action. Also, ESOP programs frequently improve morale. The National Center for Employee Ownership studied employees' reactions to ESOPs in the early 1980s. The study found employees who owned more shares were more committed to their companies, that employees enjoyed being involved in corporate decision and policy making, and that employees appreciated receiving information on a regular basis on how ESOPs operate.

OVER the past decade, American companies have tried hard to find ways to discourage senior managers from feathering their nests at the expense of their shareholders. The three most popular [...]

Although the Employee Stock Ownership Trust of J.C. Nichols Co. will soon own 32 percent of the company's stock, the ESOT may find its stake diluted by Nichols' recently enacted [...]

A hedge-fund group's offer to acquire all the stock owned by J.C. Nichols Co.'s Employee Stock Ownership Trust would give it a 40 percent stake in the company and likely [...]

Britain's Labour government supports employee stock ownership plans (ESOPs). It wants to encourage employees in the part-purchase of private companies and is currently looking at ways to improve business incentives. Private shareholders are taking advantage of tax breaks by reinvesting money from share sales into ESOP schemes. Corporate finance houses such as Capital Strategies offer advise on ESOPs and management and employee buyouts.

Computer-systems integrator plans to use proceeds to fuel expansion ROBINSON TOWNSHIP -- Computer-systems integrator Ciscorp Inc., after several years of study and one false start, has launched an employee stock [...]

Three years ago, the owners of Setra Systems, an Acton-based manufacturer of pressure transducers and electronic scales, were nearing retirement age. They were unwilling to hand over control by selling [...]

EMPLOYEE STOCK OWNership plans (ESOPS) continue to be a simple way to transfer ownership of private companies. They offer great tax advantages both to companies that use them and to [...]

(This is the second article in a report about Employee Stock Ownership Plans. Last week ESOPs' impacts on the economy were addressed. This week's story considers the economy's affects on [...]

ESOPs: Boon To Island? More and more LI employees are walking around their companies like they own them. And some do, at least in part, as members of Employee Stock [...]