Taxation and Accounting for ESOPs

Arrowsmith, Carol; Anderson, Mark C.

doi:10.1007/978-1-349-12938-6_4

Cited by 1 publication

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“…In effect, money circulates around institutions connected to the trading part of the company, to provide a zero-cost, low risk vehicle for employees to acquire a PARTICIPATION AND INDUSTRIAL DEMOCRACY share of their company's equity. Employees are exempt from income tax on the value of their acquired shares as a benefit from employment if the shares are retained in trust for five years (though they become beneficial owners after two years, and hence acquire direct voting rights) (Arrowsmith and Anderson, 1992). Most bus company and philanthropic ESOPs take this form.…”

Section: 'Case Law' Esopsmentioning

confidence: 99%

The Impact of Employee Share Ownership Plans On Employee Participation and Industrial Democracy

Pendleton

McDonald

Robinson

1995

Human Res Mgmt Journal

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This article examines employee participation in recently‐formed employee share ownership plan organisations (ESOPS) in the UK. the various legal/institutional forms of ESOP are outlined prior to considering the nature and determinants of participative institutions and processes. It is suggested that there are three ‘constellations’ of ESOP in terms of employee participation:‘technical ESOPS’, ‘paternalist ESOPs’ and ‘representative ESOPs’. There are relatively few innovations in participation in the first of these, while in paternalist ESOPs, innovations centre on individualistic forms of participation and communication at the level of the workplace. In representative ESOPs employees gain more of a say in strategic decisions through such innovations as employee representation on company boards. It is argued that these differences in the nature of participation are due neither to differences in legal structure nor to variations in the extent of employee share ownership. Instead, participative systems are viewed as the outcome of the philosophies and objectives of those involved in the conversion to employee ownership.

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Section: 'Case Law' Esopsmentioning

confidence: 99%