Thursday, June 30, 2011

Views of a Corporate-Market Centric and his Fine Lines

I was doing some research on multinational corporate executives and while looking for Procter and Gamble´s
situation, found a letter by a critic of excessive executive compensation, but an anti-environmentalist.  How would I reply to him?  Whoo boy....

Will SEC's 'Say on Pay' Rule Do Any Good?

Our resolution would allow a vote by shareholders on executive pay. Although it would be advisory only, it would allow shareholders to have a voice on this issue, so much in the news now.
(Then-P&G CEO A. G.) Lafley is making over $25 million this year. I understand that he could walk away with another $95 million or so, if he were to exercise his stock options. This is too much. It doesn't matter that this is a profitable, well-run company. It doesn't matter that P&G's stock has not plummeted to single digits like so many others in the midst of this crisis.
I am not a socialist. I am not the AFL-CIO. I do want to live in a society where it is possible to become rich. What I am worried about is that Mr. Lafley and other executives are spoiling things for everyone else.
The public company should be viewed a marvelous institution. It allows ordinary people to have a stake in, and benefit from, the operation of an economic behemoth like P&G. But when the disparity between executives and their employees and customers becomes so dramatic, the moral underpinnings of capitalism are undermined.  The result is usually demands for increased state intervention in the economy, the result of which is always a reduction in individual freedom.

...There is another way excessive executive pay hurts shareholders and society in general. I believe it makes executive more susceptible to acquiescence to the demands of anti-business activists. The anti-corporate Left has a new strategy. Instead of seeking to put companies out of business, it now seeks to take them over, or at least their public relations departments.  Do CEOs allow this because these socialists are the natural critics of excessive pay, and they can be bought off by endorsing the Left's pet causes?
If you go to the P&G website, you don't find much about the free enterprise system or defending capitalism, the system that makes possible corporate profits. Instead, you see words like sustainability. When used by the activists who promote it, "sustainability" means that the world is running out of things so therefore the state must be empowered to substitute its decision making for that of the market.
P&G is a member of something called the Carbon Disclosure Project Supply Chain Leadership Council. This group is premised on the belief that we should release less carbon dioxide into the atmosphere, even though carbon dioxide is produced by many natural processes, including our own bodies when we exhale. The big companies who comprise the council impose this agenda on their suppliers, raising their costs.
Of course, the jury is still out on whether carbon causes global warming or even whether global warming is  taking place. The effort by Al Gore and others to monetize the air we breathe may turn out to be the biggest scam in the history of mankind. Time will tell. 31,000 individuals with science degrees have now signed a petition questioning global warming. I wonder if Mr. Lafley consulted with any of these people before P&G signed up for the Carbon Disclosure Project.

Mr. Lafley did put out a press release endorsing the $700 million Wall Street Bailout. He acknowledged that P&G had not been affected by the crisis but expressed concern that its suppliers were. Where was the concern for suppliers when P&G signed up for the Carbon Disclosure Project Supply Chain Leadership Council?
The head of the Carbon Disclosure Project recently called for a new Kyoto-style treaty that would be binding in international law to reduce carbon emissions. Such a treaty would be devastating to our economy, raise the energy costs of P&G, and hurt shareholders.
Of course, if you have already made such vast sums of money you really don't have to worry about lost opportunities for others. But it is not fair.

     OK.  "It is not fair."  I´m in agreement there.  However, how is it that you view lost opportunities for others?  There are limits that the writer is perceiving, in fact.  There is some point, he seems to be perceiving, at which one person´s gain is in fact another´s loss.  The environment is not such a case, he seems to suggest, but the market is.

     Well, this point raises a critical issue, and suggests a key point in human economic psychology: the perception of the continuity between human social relations, market behavior, corporate governance, and ecosystems.  I just received a message from the Organic Consumers Association with information that reveals another level of this kind of problem.  Horizon Organic is linked to member-owned co-op Land O´Lakes by ownership, with both owned by Dean Foods which is establishing collaborative practices with Monsanto.  See below:

Organic Spies Strike Again: Exposing the Shocking Links Between the Biotech Industry and the Organic Trade Association

After the success of "Organic Spies Find Lies," the organic industry's most diligent muckrakers, the Organic Spies, are at it again with a new documentary, this time exposing the connection between Horizon, Dean Foods, Land O' Lakes and Monsanto.
Watch the Video and Take Action
Dean Foods, the largest dairy corporation in the U.S., owns Horizon, the leading organic milk brand, as well as White Wave Silk soy milk which switched from using organic soybeans to so-called "natural" soybeans.
Most of the new GMO alfalfa that will be grown in this country will be used to feed dairy cows producing milk for Dean Foods, who of course already force-feed their factory farm bovines on genetically engineered corn and soybeans.
Monsanto and Forage Genetics' alfalfa represents a major threat to the integrity of organic milk, as GMO alfalfa will inevitably contaminate organic alfalfa fields, but of course Dean Foods/Horizon/White Wave didn't try to stop GMO alfalfa. The same PR flak who lobbies for Dean Foods lobbies for Horizon!
And it gets worse. Dean Foods is the primary marketing agent for Land O' Lakes, a giant dairy, seed, and biotech company which owns Forage Genetics, the co-patent-holder, along with Monsanto, of GMO alfalfa!
Land O' Lakes, is the largest livestock feed seller in the U.S. With almost all soy and corn being GMO, and 98% of soy and 60% of corn being used as animal feed, that makes Land O' Lakes the biggest pusher of Monsanto's GMO crops. Land O' Lakes also sells Monsanto's GMO seeds and Roundup herbicide.
As a dairy processor, Land O' Lakes used to be a competitor of Dean Foods. They went from competitors to partners with a licensing agreement for Dean to process and distribute Land O' Lakes dairy products. Now Land O' Lakes is a Dean Foods brand, along with Horizon, Silk, and International Delight. Dean Foods might as well sell Monsanto-brand milk!
Organic Consumers Association is calling for a boycott of Dean Foods and all of its brands, including Horizon and Silk, to protest GMO alfalfa and all of the other crimes against human health, worker safety, animal rights and the environment caused by Dean's factory farmed dairies.
Watch the video and take action

       This is a challenging issue to breach.  I have been scientifically oriented for a long time.  True to my undergrad degree in Biological Anthropology, I am now applying this interest to the issue of insulated corporate market centric views.  Pepsi, Dell, Cisco, Intel, Google, Whole Foods, HSBC, the US Air Force, and Native Energy are all enterprises investing significantly in green energy.  Think about that.  While several of them also value higher levels of employee ownership than many, examples like Equal Exchange foods, Once Again nut butters, Native Energy, NCB National Co-op Bank, England´s Co-op Bank´s  solar projects, NGO-owned Green Century Mutual Fund´s shareholder activism all show how the local ownership model can be built with an internalized ecological literacy and cost valuation.  Don´t take my word for it.  Look them up.

Monday, June 27, 2011

Eight Additional Activist Campaigns: Public Citizen to Credo....

What follows are eight updates on campaigns by various non-profit NGOs addressing various injustices, especially those by profit-maximizing corporations and their supporters.  
1) Public Citizen´s corporate anti-consumer rights´campaigns
2) Preventing anti-labor legislations by American Rights at Work 
3) Credo Telecom Action and Greenpeace´s anti-hydrofracking campaign
4) Jobs With Justice´s August conference
5) A Fall Solidarity Economics conference in Montreal 
6) Anti-Cuba legislation by the Latin American Working Group 
7) A Korea Free Trade Agreement campaign by the Long Island JWJ
8) Another Credo campaign about Telecom corp.´s funding of the right-wing.

1) Everyone has heard the story about Stella Liebeck, the 79-year-old woman who supposedly received millions of dollars after spilling hot McDonald’s coffee.

Corporate interests shaped her story into one about “sue-crazy consumers” and “greedy lawyers” teaming up to file a “frivolous lawsuit” against poor unsuspecting businesses like McDonald’s.

Corporate America’s version of this story was designed to manipulate the media and dismantle consumer rights.

Watch the trailer for “Hot Coffee,” the new documentary about corporate attacks on our civil justice system and learn what really happened.

For decades, Public Citizen has been fighting Big Business’ attempts to stop consumers from using our civil justice system to hold reckless corporations accountable.

In addition to the corporate misinformation campaign about the McDonald’s case, the documentary also details efforts to undermine the very structure of our legal system.

Attempts by lawmakers to prevent injured patients from holding big players in the medical industry accountable for wrongdoing are one example of such attacks.

Another example is the forced arbitration clauses that many corporations bury in the fine print of contracts for employment and consumer products. The clauses force wronged individuals into making their case before biased, unaccountable arbitrators that are dependent on corporations for repeat business.

Learn about what really happened in the McDonald’s case and other important issues facing consumers in the courts.

2) Wanted to make sure you saw this. Gov. Christie is expected to sign the bill this week, crushing the rights of 500,000 workers to collectively bargain over health care benefits.
And New Jersey's firefighters, police officers, and other public employees aren't alone. The New Hampshire legislature repealed their minimum wage law last week, and workers in Maine and Ohio are desperately fighting equally outrageous proposals from state lawmakers.
If there were ever a time to double-down our efforts in making this country a good place to work, it's right now.

3) We wanted to share with you this opportunity from our friends at Credo Action to communicate with Congress about the issue of Hydraulic Fracturing (or Fracking) for natural gas.

4) Corporations want to use the failing economy as an excuse to reverse every worker protection put in place over the last century, but we are standing together and fighting back!
Come to the Jobs with Justice conference August 5-7 in Washington, DC to learn from and strategize with labor leaders, rank & file workers, students, religious leaders, community activists, workers excluded from labor law protection, and many, many more about how to build a powerful movement of working people to defeat the corporate agenda & build a better future for our communities, our country, and our world! Join us as we explore:
  • Establishing a new framework for collective bargaining rights in the 21st century
  • Building a new economy that supports full & fair employment
  • From the Middle East to the Midwest, building a culture of resistance - what’s next?
  • Defending, promoting, & expanding collective bargaining rights
  • Defeating attacks that divide workers by turning the tide on immigration criminalization & enforcement
  • Forging successful coalitions to defeat the corporate attack on working people
  • Kickoff to the Jobs with Justice 25th Anniversary Celebration
Visit to learn more about the conference program,

5) There is an international social and solidarity economy conference in Montreal this fall:

6) Today the House Appropriations Committee voted in favor of an amendment, put forth by Representative Mario Diaz-Balart of Florida (R-FL 21st), to the FY 2012 Financial Services Appropriations bill. This amendment, which passed by voice vote, rescinds changes that President Obama made in 2009 to Cuban-American family travel and remittances regulations. If this amendment were to become law, Cuban Americans would only be permitted to visit their families in Cuba once every three years, with a limited definition of what constitutes family, and with no humanitarian exceptions. Cuban Americans would also be limited in what they could send in remittances to Cuba. We would be back to Bush Administration-era regulations on family travel. This is totally unacceptable.
Latin America Working Group
7)  Stop the Korea Free Trade Agreement

1) If you are a member of an organization, congregation, or union, please sign onto a letter against the FTA Today!

2) Call your Congressional Representatives and ask her/him to Vote NO on the Korea FTA!

Join the national campaign and state-wide day of action to stop the Korea trade deal in its tracks. While the U.S. - Korea Free Trade Agreement (FTA) is good for corporations and Wall Street, those on Main Street will once again be left behind. The Korea FTA will put 3.5 million U.S. jobs at risk during a time of record high unemployment. Powerful interests of greedy multinational corporations are already lobbying members of Congress. Now more than ever Congress must hear from YOU and all their constituents in opposition to this job-killing deal.  Take action and tell your Representative we can't afford to lose any more jobs-- Vote No on the Korea FTA!
Long Island Jobs with Justice

8) Does Your Phone Company Support the Tea Party?
Rep. Michele Bachmann, ringleader of the House Tea Party Caucus, is on a slash-and-burn campaign aimed at anything remotely progressive. Defund the EPA. Gut the funds for community health centers. Slash the Head Start budget for preschool kids. Prevent any government money from reaching Planned Parenthood or NPR. You get the picture. And Bachmann is backed by her Tea Party Caucus and the House GOP leadership.
So which phone companies helped fund the budget-slashers? AT&T and Verizon Wireless contributed $386,000 and $35,500 respectively to members of the House Tea Party Caucus in the 2010 election cycle, and both companies donated to Bachmann.
At CREDO, we fight the right wing—with a network of 2 million activists and with millions of dollars in donations to progressive nonprofits like the ACLU, Planned Parenthood, Earthjustice and Doctors Without Borders, to name a few. Join the fight. Join CREDO Mobile.

Monday, June 20, 2011

Which Side Are You On? New Language for a New Political Reality

I just found this very stimulating article by Scott McLarty through the US Green Party Website:

Which Side Are You On? New Language for a New Political Reality

....For Republicans and Tea Partiers, the Constitution might as well be written in hieroglyphs. Except for the Second Amendment's right to bear arms, they decline to apply the Constitution to the denial of habeas corpus, warrantless surveillance of US citizens, torture, disregard for international treaties signed by the US, and other abuses that are clearly outlawed.

On the other hand, they enthusiastically defend the Supreme Court's 2010 Citizens United ruling, which upheld 'corporate personhood' and exacerbated the widespread corruption of our election system, even though the Constitution grants no rights to corporations and the Founding Fathers warned against the excessive power of the monied interests. Corporate personhood was enshrined by a series of Supreme Court rulings, beginning with Santa Clara County v. Southern Pacific Railroad in 1886, which extended the 14th Amendment's equal protect clause to cover corporations. The rulings coincided with the post-Reconstruction passage of the first Jim Crow laws in the South and the beginning of the Robber Baron Era. In effect, legal rights and protections were transferred from black people to corporations.

All of this gives us a clue about the real ideology motivating today's conservative (and many liberal) politicians, media pundits, and activists: corporate power, profit, and privilege.

All other principles are subservient to corporatism. The GOP isn't opposed to socialism when it satisfies corporate lobbies, as the Wall Street bailouts prove.

Consider Gov. Rick Scott of Florida, currently on a mission to overturn the Democrats' health care reform bill. Does Gov. Scott really oppose public spending for health care? In 1997, he was forced to resign as CEO of Columbia/HCA after the company pleaded guilty to 14 felonies and agreed to a $600-plus million fine in the largest fraud settlement in US history, for fraud involving Medicare and other public health programs. For bilking taxpayers out of hundreds of millions, Rick Scott was paid $9.88 million and allowed to keep 10 million shares of stock worth over $350 million.

Republican politicians might be gunning for Medicare and Medicaid, but they're not above making a killing from such programs, on behalf of themselves and the corporations they're connected with via the public service/private business revolving door. The same ideology informs the granting of no-bid contracts, tax breaks and loopholes, and other forms of subsidies to favored firms.

George Lakoff notes that "The wealthy have, to a large extent, amassed that wealth through indirect contributions to them by governments -- governments build roads corporations use, fund schools that train their workers, subsidize their energy costs, do research they capitalize on, subsidize their access to resources, promote trade for them, and on and on."

Dedication to corporate interests overwhelms all other concerns. It turns the conflict between free-market capitalism and socialism into a quaint relic from another century, rather like the conflict between the German princes and the Roman Catholic Church during the Reformation. It makes the free market into a myth for the gullible who believe that locally owned Main Street shops can compete with WalMart or Old McDonald's family farm has a chance against Monsanto.

Conservatism means, or should mean, emphasis on entrepreneurialism (as opposed to corporate capitalism), self-reliant local economies (small businesses and farms, rather than big chain stores and agriconglomerates), economic security for Americans (freedom from destitution because of unemployment, old age, or the cost of medical emergencies), democratic sovereignty (rather than subordination to international trade cabals), observance of the US Constitution and international laws and treaties that the US has signed (Article VI), and deployment of the US armed forces solely for immediate self-defense.

Today's conservative leaders have abandoned these ideas and replaced them with a scheme to manipulate government for a radical redistribution of wealth from the bottom to the top. For these politicians, government is only a threat to America when it benefits working people or the poor or public health or the environment. Big government for big business is perfectly acceptable.....


Credo Campaign IDs Monsanto Propaganda on Public Media

I just received this email from Credo Telecom about a Public Media program unduly influenced by Monsanto:
Millions of Americans who demand a higher standard of news reporting turn to public radio because it's supposed to present information that isn't bought and paid for by corporate interests.
Unfortunately, American Public Media may be making an exception for GMO giant, Monsanto.
Marketplace, a program of American Public Media, has provided a soapbox to opponents of organics with a recent report titled "The Non-Organic Future." This poisoning of public radio programming — and news that's assumed to be unbiased and fair — aired on a program that has received substantial sponsorship from Monsanto, the corporation responsible for producing roughly 90% of genetically modified seeds around the globe.
In a recent report entitled "The Non-Organic Future" Marketplace featured several outspoken proponents of industrial agriculture who presented as fact the false notion that organics are not a scalable, or even viable option for feeding the planet. Not one counter-argument or undisputed proponent of the organics industry was presented.1

Thursday, June 16, 2011

Mattel Toys: Indonesia´s Forests and Greenpeace´s Campaign

I recently received an email from Greenpeace about this campaign:

Mattel to stop supporting deforestation in Indonesia, nearly 1,000,000 people around the world have watched our video of Ken and Barbie’s break up, and to top it off, two groups of Greenpeace activists unfurled two giant banners at Mattel’s headquarters in Los Angeles.

The pressure is working. Mattel has stated that they will take initial steps to address this issue, but without details or timelines their words alone are not enough.

Check out the incredible video of the  protest and send a clear message to Mattel: we need action – not vague promises – to save Indonesia’s rainforests.

In response to the campaign, Mattel first announced that it would direct “packaging suppliers to stop sourcing pulp from Sinar Mas/APP [Asia Pulp & Paper] as we investigate the deforestation allegations.”  The company later also announced that it will develop a "sustainable procurement policy" for paper and other wood-based products.

This is encouraging progress, but it’s not enough. There are only 400 Sumatran tigers left in Indonesia’s rainforests, and every day the destruction of their forest homes drives them closer and closer to extinction.

Without an actual written policy in place to protect rainforests, Mattel’s investigation has no teeth, and the problem has not been solved. We are willing to help them develop this policy and answer their questions, but until then, our campaign continues.
We need to be sure that the world’s largest toy company is going to show leadership on this issue. Companies can change pretty quickly, and once Mattel does, other companies implicated in Indonesia’s deforestation will have to follow their lead to remain competitive.

When companies like Mattel stop buying their products, Asia Pulp & Paper will be forced to stop their destruction of tiger homes and rainforest habitat.

ESOPs: Unsung Tools for Co-ops

I recently had a discussion with a colleague, and commented that rich executives had abused power and influence to establish their highly concentrated and monopolistic positions in the economy.  My colleague responded that they had expressed their intelligence and talent legitimately, and if others were deserving of success, they would achieve their success in the same way.

      The superficial logic of my colleagues position is based on a narrow range of experience and study, and follows the conventional thought promoted by the prevailing actors in mainstream media.  In considering the nature of her sources of information, I have begun to reflect on an alternative information presentation as a base for constructive dialogue.  Here are some selections from articles I just collected:

Employee Stock Ownership Plans (ESOP)
    Uploaded by london28 (20) on Dec 10, 2004

....There are benefits to both the employer and employees in having an ESOP.

Some of these benefits to the employer are:

1. ESOP allows an employer to indirectly borrow money from a bank and repay the loan with fully deductible repayment amounts.
2. Company can sell its stock and redeem it without reducing the true value of the stock.
3. The company can increase its working capital, cash flow, and net worth..
4. An ESOP assists in establishing and maintaining a stable, high performance workforce.
5. It can act as a medium to retain desired employees.
6. An ESOP can be a decisive factor in motivating employees and building loyalty.

As stated above an ESOP is also beneficial to employees as well, some of these benefits include:

1. Participation in any ESOP gives employees equity opportunities with no cash investment.
2. Employees have a chance to voice their views at the policy making levels of the organization.
3. Employees pay no tax on stock until distribution is made.
4. ESOP increases motivation by directly relating the value of their retirement benefit to the value of the shares of stock allocated to their account.

In 1986 there were approximately 8000 companies which had ESOPs with equity into the hands of approximately 11 million employees. Today there are over 11,000 companies, including big companies such as United Air Lines, PepsiCo, Merck, Bristol-Myers Squibb, Bank of America, Chase Manhattan, and Starbucks, who have ESOP putting about $1 trillion in equity into the hands of approximately 17 million employees. Statistics show that companies with Employee Stock Ownership Plans are 1.5 times as profitable as comparable conventionally owned companies. One such success story has been that of Starbucks.

When Howard Schultz bough the company and took over as a CEO in 1987, Starbucks was a local business with 6 stores and less than 100 employees. Schultz wanted the employees to have a chance to share in the benefits of growth, and to make clear the connection between their contribution and growing value of the company. Keeping this in mind his goal was to link shareholder value with long term rewards for his employees and thus giving employees a chance to create their own value. In 1991 Starbucks introduced the “bean stock” option to the employees. Even with no guarantee that the option would ever be worth anything, “bean stock” affected peoples attitudes and performance immediately. They started coming up with innovative ideas about how to cut cost, to increase sales, to create value and the most important they spoke to the customers from the heart as partners in the business. Six years later, after the introduction of “bean stock”, in 1997 Starbucks had more than 13,000 stores and 25,000 employees with stores in cities all over North America as well as in Tokyo and Singapore. Starbucks sales and profits have grown by more than 50% a year for 6 consecutive years. According to Schultz, Starbucks’ secret weapon has been giving stock options to everyone, from managers to baristas. Schultz believes that giving stock options helps the employees to see a connection between their work and Startbucks’ fortune.

Statistics show over and over that ESOPs increase profitability and help retain talent. Besides Startbucks couple of such examples are that of United Air Lines (UAL) and Texas Instrument (TI). In 1994, UAL corp., in exchange for steep pay cuts introduced ESOP. According to Captain Curtin of UAL “what he as seen is record $4.9 billion swap; uninterrupted labor peace, job security, worker clout in the boardroom, and expanding air line that is the worlds largest and often, most profitable, and a retirement nest egg fro 80000 present and past employees”. Similarly, TI was faced with a problem of losing top technical talent to the competition. As a result TI introduced stock options to target most talented employees. The company gave managers the authority to grant stock options to their best performers and as a result there was 8% decrease in turnover in key jobs in five years.   /  Overviewing the success story of Starbuck and past surveys we can conclude that a major reason for the profitability of companies is significant amount of employee ownership along with the kind of management that first entertains employee ownership ideas, and then implements them and makes them work. Managers with such views and interests may also be the kinds of managers who lead their organizations in attaining significant shares of their markets and high levels of profitability, Howard Schultz is an excellent example of such a CEO. As he says “If I hang my hat on one thing that makes Starbucks stand out above other companies, it would be the introduction of “bean stock”. With its introduction we turned every employee of Starbucks into a partner. I wanted to find a way to share both the ownership of the company and the rewards of financial success with the people of Starbucks”.

Publix Supermarkets Tops Employee Ownership 100 List
Publix Supermarkets continues to be the largest majority employee-owned company in the U.S. and, almost certainly, the world. It employs over 120,000 employees in over 800 stores in five Southern states. It consistently shows up on lists of the most admired companies and best places to work, and, year after year, has the highest customer satisfaction scores of any supermarket (and sometimes of any kind of business, period). Publix was started with one store in Florida in 1930. Employee ownership goes back to 1945, when founder George Jenkins created a share bonus and stock purchase plan for all full-time employees. In 1980, an ESOP was set up, with annual contributions around 10% of pay. Employees can also buy stock in the 401(k) plan and, since 1959, a stock purchase plan. Only Publix employees can buy stock, and 100% of Publix is owned by the various plans. The company's stock has far outperformed the market, and a typical associate would earn twice one year's pay over 10 years in the ESOP. The Publix culture is very focused on extraordinary customer service, as its awards would suggest. Anecdotes about some of the more remarkable examples of devotion to customer service can be found in a new book, The Story of Customer Service at Publix, by Joe Carvin, former HR manager at the company.  /
p.1  On a rainy business trip to Florida recently, I got up early and put on my Gore-Tex running outfit to go out for my morning jog. After showering, I threw my Crest Toothpaste into a bag and hurried over to Starbucks for coffee and a pastry. I needed to catch my Southwest Airlines flight soon, but I left my razor at home, so I rushed into the Publix Supermarkets and picked one up. It was going to be a long day, but I felt good that all the products and services I'd used so far had come from companies where the employees were substantial or principal owners.  /  .... during the last decade, the number of companies sharing ownership broadly with employees has grown substantially. While precise numbers are not available, we estimate that as of 2009 about 9 million employees had stock options, restricted stock, phantom stock, and/or stock appreciation rights. There are about 11,500 ESOPs in the U.S. covering almost 14 million participants and controlling several hundred billion in assets. Of these, about 5% are in publicly traded companies and 95% in closely held firms. The median percentage ownership for ESOPs in public firms is about 10-15%. Most public firms maintain an ESOP along with other benefit plans. The median percentage ownership for private firms is about 30-40%, with about 3,000 companies now majority employee owned.....  /  A significant number of companies provide stock options or other kinds of individual equity to most or all employees. Google, Southwest Airlines, and, Starbucks are among the better known examples.....
p.7 ....At United Airlines, for instance, employee task teams were formed soon after the employees purchased the company. Over the ensuing two years, the teams took apart every aspect of the business, making recommendations for often substantial changes. The teams were appointed to include a broad cross-section of employees, but anyone could volunteer to join one. The ideas helped generate hundreds of millions of dollars in cost savings and new revenues. Ironically, when the teams completed their work, management backed away from the idea of participation, causing the airline some well-reported difficulties in the years that followed. The ESOP is now frozen and both most managers and employees feel that it was not a success. United shows clearly that just setting up an ESOP, and even starting off in the right direction, is not enough. Companies must commit to a long-term ownership culture program.

Stone Construction Equipment Company in Honoeye, NY is a good example. It set up an ESOP set up in the late 1970s was having little impact. Then the company hired a new president, Bob Fien, who started a participative management program. Eventually, all employees were trained in "just-in-time" management and organized into work cells that schedule and control their own work flow and have considerable input into the design and organization of their jobs. Stone had been limping along and had developed a reputation for poor quality; by 1991, the company had made so much progress Industry Week named it one of America's top 10 manufacturers.   /  At Springfield ReManufacturing in Springfield, Missouri, employee owners are taught to read detailed financial and production data. Meeting in work groups, they go over the numbers then figure out ways to improve them. Employees are sometimes given 90-page financial statements to digest. Springfield's stock went from 10 cents a share when it started its ESOP in 1983 to $21.00 in 1994. Employment increased over 500%.
Other approaches include employee advisory committees to management, eliminating levels of supervision while giving non-management employees more authority, meetings between management and randomly selected groups of employees, suggestion boxes, and anything else companies can imagine to get people involved.  / This "high-involvement" management style has, of course, become conventional wisdom, if still unconventional practice, at many companies. Is ownership really essential to make it work? There are no conclusive data on this, but there is good reason to believe that ownership, if not essential, is at least highly desirable. First, ownership is a cumulative benefit. Each additional year, an employee has more and more at stake in how well the company performs. It is not unusual in mature plans for the appreciation in share value and employer contributions to add up to 30% to 50% or more of pay in a year. In profit sharing or gainsharing, both of which are paid periodically and almost always amount to a small portion of total compensation, the benefit always remains relatively minor. Second, ownership has a stronger emotive appeal. People may be very proud to say they are an owner; few would brag to friends they are a profit-sharer. Finally, only ownership encourages people to think about all aspects of a business, not just short term profits or some efficiency measure. This is especially important in companies moving towards open-book management systems./
The key for the success of “positive corporate governance,” as envisioned by McConvill might be for organizations such as the Business Roundtable to hold up as an ideal for executive pay CEOs like Costco’s Jim Sinegal. Last year he earned a salary is just $350,000, plus a $200,000 bonus. Costco’s average pay for employees is $17 an hour; 42% higher than its rival Sam’s Club. By many measures, including its health plan, Costco’s model is more sustainable, in terms of treating its employees, host communities and even its shareholders better in the long run than Wal-Mart. [(How Costco Became the Anti-Wal-Mart, NYTimes, 7/17/2005) (Disclosure: The reviewer is a Costco shareholder)]....  /  McConvill says he does not attempt to construct a new pay-setting approach, although he suggests “best practice” might tie executive compensation to “15-20 times average weekly earnings” of employees. He also cites a study in New South Wales that found excessively high pay levels for CEOs coincide with lower corporate earnings. Christopher Mann of Moody’s recently authored a report that found businesses that offer their CEOs unusually large bonuses or option plans have higher bond-default rates and more frequent and deeper rating downgrades than their peers, (Report Links Defaults, Excessive CEO Pay, /

On 81st birthday, Oregon man gives company to employees

By DANA TIMS  The Oregonian  MILWAUKIE, Ore. — Scores of employees gathered to help Bob Moore celebrate his 81st birthday this week at the company that bears his name, Bob's Red Mill Natural Foods. /  Moore, whose mutual love of healthful eating and old-world technologies spawned an internationally distributed line of products, responded with a gift of his own — the whole company. The Employee Stock Ownership Plan that Moore unveiled means that his 209 employees now own the place and its 400 offerings of stone-ground flours, cereals and bread mixes.  /  "This is Bob taking care of us," said Lori Sobelson, who helps run the business' retail operation. "He expects a lot out of us, but really gives us the world in return."  /  Moore declined to say how much he thinks the company is worth. In 2004, however, one business publication estimated that year's revenue at more than $24 million. A company news release issued this week stated that Bob's Red Mill has chalked up an annual growth rate of between 20 percent and 30 percent every year since.  ..../
Our story goes something like this:  Forty years ago, Berkeley's now-famous cooperative, the Cheeseboard, opened its doors. In 1997, inspired by their own success, they helped open another bakery based on cooperative principles. Arizmendi Oakland debuted that year on Lakeshore Avenue, named after the Basque labor organizer. endeavor was a hit, so what next? They decided to open another bakery, this time in San Francisco. Once again the group, along with members of the Oakland store, graciously imparted their knowledge of cooperative business practices and shared secrets of their recipes.
In October of 2000, Arizmendi Bakery San Francisco was born. The Cheeseboard's gift to us has become our gift to the neighborhood.
Published on Sunday, April 18, 2010 /Last updated on Tuesday, April 27, 2010 Arizmendi's baked goods. Photographs by Tony Nguyen.Mention ‘Arizmendi’ to most Bay Area bread lovers and watch their eyes glaze over as they recall the intoxicating aromas and scrumptious flavors of artisan breads, pastries, cookies and pizzas. Yet as heavenly as these lovingly hand-crafted baked goods are, there’s more that sets Arizmendi bakeries apart from the rest.
Each bakery is a cooperative, owned by its workers or members and democratically operated........ Victor Hernandez, a member of Arizmendi in Oakland for three years, serves on the Policy Council and is a member of the DSC. Every Friday he trains workers at the new bakery in San Raphael and tries to impart Arizmendi’s co-op philosophy. He said he compares the culture of the co-op to that of a family.  //  “It’s like a mom and dad: If they love each other, the kids will be taken care of. The members are the parents, the bakery is the kid,” he said.
According to Hernandez, although both the recipes and business model have proven to be successful, new workers have to get used to the co-op's culture. Hernandez said members learn to compromise and respect each other's skills. The underlying philosophy is that members' working styles and speed aren’t being measured, and that everyone is an equal and completes their work in their own way.  //  Jessica Brogdon, a member at Arizmendi in Oakland for eight years, said she believes the food quality stays high because everyone has an equal stake.  //  “It’s your business. You take more responsibility when you’re working for yourself," she explained.
Hernandez said most of the 26 members have been there about eight years and there is little turnover. Committees focus on various aspects of the business, such as production, benefits and grievances. Any worker can serve on a committee; a general meeting, led by a member-facilitator, is held once a month.
New members must be approved by 90 percent of the co-op after serving a six-month candidacy period to see how well they mesh with other owners. A new member pays $3,000 for his or her share of the business. Rather than pay that money upfront, the cost is deducted gradually from wages, typically $50 from each paycheck.  //  How does the group select new members? It’s not all about the work, Hernandez explained, “but how the candidate fits in and gets along with the group. Although ‘Heart’ isn’t on the application," it's an intangible that matters. The team asks "How dedicated are they? How much do they care about the person they’re working with?" in making their decisions.
In additional to being equitable, Arizmendi's baked goods (including the pizzas) are super-delicious. /

PepsiCo shares power and stock with workers

Article Abstract:
PepsiCo Inc. was given the 1995 Personnel Journal Optimas Award for service. The beverage, fast-food and snack giant has a strong entrepreneurial culture that stresses individual contribution in a small-firm environment. This mind-set is nourished through an employee stock option plan (ESOP) design to reward service, increase shareholder value and empower all employees. The firm's human resources staff examined many ESOPs in other firms but found that these tended to include top management only, replace other benefit programs and act as an entitlement more than as an incentive plan. PepsiCo approached its ESOP from a different perspective and opened it to all full-time employees over and above their regular compensation and benefits package. The resulting plan, Share-Power, grants stock options every year to workers based on 10% of their total yearly pay. The program serves as a strong incentive for entrepreneurship by resulting in sizable returns.

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