Employee-Owned Top Small Workplaces, IEI, HR 333, and Broad-Based Equity Grants

The May 15, 2008 Employee Ownership Update is online and discusses the following:

• Indiana Initiates ESOP Support Program
• Hinchey, Rohrabacher Introduce Pro-ESOP Resolution in Congress
• Many Compensation Consultants Ignore Research Supporting Broad-Based Equity Plans
• Take the NCEO Survey on Equity Compensation in Closely Held Companies
• Winning Workplaces Webinar on Employee Ownership

The Update discusses the Indiana's ESOP Initiative (IEI) and H. Con. Res. 333: Expressing continued support for employee stock ownership plans. It also discusses how five of the 2007 Top Small Workplaces are employee-owned and how two of the five, Reflexite and Phelps County Bank, will be presenting an employee ownership webinar, Building an Ownership Mentality Among Employees. For more information about the Top Small Workplaces and the presenting companies, here are some links to prior blog posts:

• ESOPs in Existence for At Least 25 Years (4/17/08)
• Eudaimonic Well-Being and Factors in Happiness (4/7/08)
• More Top Small Workplaces Coverage/Employee Ownership Month (10/9/07)
• In the News: Benefits, Risks, and Challenges of Employee Ownership, Maintaining an Ownership Culture as the Company Grows (10/04/07)
• In the News: Top Small Workplaces, High Retention Rates, Thinking Entrepreneurially, and Feeling Empowered (10/2/07)
• Combining Broad-Based Employee Ownership and Participation in the Management Process (5/7/07)

The Update also discusses how many compensation consultants ignore the evidence that links broad-based equity grants to improved corporate performance, noting that "there is, in fact, ample evidence linking broad-based equity grants to improved corporate performance, while equity grants to top executives produce at best mixed results.":

It's hard to say whether the continuing bias is the result of simple ignorance, a self-serving desire to tell executives (who pay compensation professionals' bills) that only executives matter, or a too-facile assumption that individuals below top executives rarely affect how the company does. The continued existence of this bias, however, remains a major barrier to more progress on broad-based grants.