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Experts weighed in on employee stock option plans during a panel moderated by Corey Rosen, the executive director of the National Center for Employee Ownership at The Deal's Innovative Deal Financing Conference Tuesday. The panelists included David Ackerman, a partner at Morgan, Lewis & Brockius LLP; Merri Ash, a vice president at First Bankers Trust Services Inc.; Elyse Bluth, a managing director at Duff & Phelps; and Mary Sullivan Josephs, a managing director at LaSalle Corporate Finance.
Ash commented that although it hasn't gotten much press, in the Tribune Co. deal the employees through the employee stock ownership plan won the auction; if Sam Zell makes $1.00, the employees make $1.30. Additionally all of the money normally paid in taxes will stay in the company.
Listing the prime benefits of ESOPs, Ackerman said that in an ESOP:
Josephs commented that:
ESOP companies grow 6% to 8% faster on average, but it's vital to create a culture of employee ownership. Some structures take money away from the employees to give them ownership, but it usually creates so much resentment among them that the company underperforms. —George White See The Deal’s Aug. 31 analysis of Tribune’s buyout Categories Deal Video
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