The provision would eliminate Internal Revenue Code section 404(k), an incentive for ESOP creation and operation that permits a C corporation to deduct the value of dividends paid on ESOP stock passed through to employees in cash, deductions used to pay the ESOP acquisition loan, or when the employee reinvests in more company stock in his/her ESOP account balance.
J. Michael Keeling, ESOP Association president, said it is counterintuitive to eliminate an incentive for a policy that resulted in fewer layoffs during the Great Recession; according to the 2010 General Social Survey, employee stock owned companies laid off employees at a rate of 2.6% in 2010, whereas the rate for conventionally-owned companies was 12.1% (see ‘Employee Stock Owned Companies Had Fewer Layoffs’). “It’s baffling to hear the Administration preach about creating jobs and then take away a proven policy that sustains jobs,” he added. (Obama’s ESOP Proposal Poses Concerns, 4/11/2013)
- Biggest PE investors: Public pension funds, Pensions&Investments, 4/9/2013. Public pension funds are the largest investors in private equity. See the leading 10 funds ranked by size of PE portfolio.
- On April 2, 2013, the SEC issued guidance on using social media to distribute material nonpublic information in compliance with Regulation FD. The guidance clarifies that Regulation FD applies to social media posts of material nonpublic information, and that companies may use social media platforms such as Facebook and Twitter to announce key information in compliance with Regulation FD, provided that investors have been alerted in advance about which social media platform will be used to disseminate such information.
Despite the fanfare this guidance has received, it certainly is not an invitation for companies to begin immediately disseminating material, previously nonpublic information via social media channels. This Weil Alert explains, among other things, the SEC requirements for FD-compliant dissemination of information to the public through corporate websites and social media, and provides important practice tips for companies considering these emerging means of communicating with investors.
- The first six months after Cranfield’s March 2012 Female FTSE Board Report saw an ‘extremely encouraging’ pace of change, with 44 percent of new FTSE 100 board appointments and 36 percent of FTSE 250 board appointments going to women, say researchers. Growth in this area was short-lived, however, dropping to 26 percent and 29 percent, respectively, over the last six months. Board diversity progress slows as fewer women appointed (InsideInvestorRelations.com, 4/10/2013).