The New York Times published this Letter to the Editor regarding the U.S. Sugar ESOP:
"In Stock Plan, Employees See Stacked Deck" (front page, May 29), about the employee stock ownership plan at U.S. Sugar, did not put the situation in context. Several academic studies of how participants fare in ESOPs show that they have about three times the total retirement assets of comparable employees in non-ESOP companies, and diversified retirement assets about the same size.
That result is because ESOP companies perform much better than non-ESOP companies.
In the specific case of U.S. Sugar, the article suggests that former employees should have been able to get the same price as the potential acquirer of U.S. Sugar offered per share for the whole company. But no acquirer would offer the same price per share for buying minority-interest individual shares that they would for buying control of the company.
If former participants got that control price, it would mean that current participant interests would be harmed, and their share value ultimately would be worth less.
Corey Rosen
Executive Director
National Center for Employee Ownership
Oakland, Calif., May 29, 2008
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