We bring your attention to a front page, long, very negative article on ESOPs in the May 29, 2008 edition of The New York Times, page 1, jump page A23, online -http://www.nytimes.com/2008/05/29/business/29sugar.html?_r=1&hp&oref=slogin

 

This story is potentially the most damaging we have seen for a very long time. ESOP Association President, J. Michael Keeling sent a letter the editor, which is posted below.

 

The article states that “employees are being cheated out of their retirement at a company in Florida” and that basic laws governing ESOPs in private companies can be manipulated.  The article also implies that in all ESOP companies management can do things to lower share price while enriching their own wealth, that employees should control whether to sell ESOP stock, that they are not real owners, and are more often than not purposefully left in the dark about the financial conditions of the company, among other things.

 

The New York Times is very influential in New York City in shaping the opinions of public policy decision makers, one of whom is Congressman Charles Rangel (D-NY), Chair of the House Ways and Means Committee. We're sure his staff also faithfully read The New York Times.

 

It was an unbalanced story and, unfortunately, ignores the 30 plus years of research that show that ESOP companies are more productive than their non-ESOP counterparts.

 

 

May 29, 2008

 

Dear Editor:

 

I am writing in response to the article by Mary Williams Walsh, “In Stock Plan, Employees See Stacked Deck,” which ran on May 29, 2008.

 

As an advocate for ESOP companies, I was taken aback by the unjust assessments put forth in the very one sided and negative article.

 

Ms. Walsh’s story cast all employee owners through ESOPs in a very destructive light because of an unresolved controversy at one company. The article ignores a huge body of research which provides evidence that ESOP arrangements are good for the company, increase sustainability and productivity, and provide in the vast majority of instances more wealth than other employee benefit plans.  Data indicates employees at ESOP companies are better paid, and are more likely to have benefit plans in addition to the ESOP.

 

A balanced report on company employees and their ESOP would serve our national debate over distribution of wealth and ownership policies better.

 

Sincerely,

J. Michael Keeling

President

The ESOP Association

1726 M Street, NW

Suite 501

Washington, DC 20036

202/293-2971 phone

202/293-7568 fax