RE: state EO programs

[John Logue <jlogue@kent.edu>]

Sara

Fortunately, a state survey is not necessary (at least not right now).  We 
recently did one and the results are posted at 
http://cog.kent.edu/Author/Author.htm as "Employees and 
Ownership:    Trends, Characteristics, and Policy Implications of State 
Employee Ownership Legislation."

I agree with Tom that a focus on retiring owners is very useful; you get 
more bang for your buck there. However, this is getting down to a 
level  where you would have to do a lot of research to determine what is 
actually being down and that, presumably, is beyond the scope of your work.

Did  I also mention the issue of whether states used available federal 
funds for preliminary feasibility work?  We have a list of those which 
have, if that is of use to you.  We've got an article on that which I can 
send you, if you like.

John








At 11:33 AM 10/26/2001, you wrote:
>Thanks to everyone who has replied to my query.
>You have all been very helpful in helping me formulate a better list of key
>criteria for a good state program.
>
>A few more questions:
>In examining state EO programs, what is the best way to collect information
>about state policies with the "best practice" elements in them?  Would a
>state by state survey be required, or is this information available
>elsewhere?
>
>Also, it seems it is not feasible for us to count targeted efforts for
>retirement in state program to date, but perhaps we can include this as an
>essential element that is not presently countable?  Is this correct?
>Thanks again for educating me more thoroughly on EO!
>Sara
>
>-----Original Message-----
>From: John Logue [mailto:jlogue@kent.edu]
>Sent: Thursday, October 25, 2001 5:30 PM
>To: EOsubnat@cog.kent.edu
>Subject: Re: state EO programs
>
>
>Tom queried me about how we identify retiring owners.  Regrettably we
>really can't.
>
>What we are doing is using the Harris Industrial Directory (manufacturing
>is our core
>constituency because of the wage scale), screening for closely held
>companies with
>25-250 employees, and mailing the seminar invitations.  Our reasoning for
>the employment
>limits have been that companies with fewer than 25 employees are poor
>candidates for
>ESOPs while those over 250 get plenty of professional advice.
>
>We mail some other lists as well.
>
>We've had a pretty full program for the last 5 years.  Registration has
>dropped this fall to
>15 per program from about 35, probably reflecting the sudden economic
>downturn with its
>pressure on companies and the reduction in multiples for valuations.
>
>John
>
>At 11:41 PM 10/24/2001, you wrote:
>
> >Ms. Lawrence:
> >
> >I think Ohio and Vermont probably provide the best examples of what may be
> >possible and desirable on the sub-national level (along with what's
> >happening in Maine, Canada, and Sweden).   Even when it was still active,
> >Hawaii's program never got beyond the following:
> >
> >- Sponsoring small-scale--but inadequately promoted--conferences about
> >every other year;
> >- Building a small library of EOP lit and offering limited technical
> >assistance upon request;
> >- Producing an annual "progress" report and Governor's Proclamations
> >observing EOP Week in Hawaii (the latter received very little publicity and
> >was also not heavily promoted); and
> >- One attempt to identify and notify business owners approaching
> >retirement.
> >
> >The annual report became our main promotional piece because there wasn't
> >much progress to report, and because it was difficult to measure "progress"
> >with precision (which was primarily defined as any increase in the number
> >of ESOPs in Hawaii because that was thought to be the most quantifiable
> >criterion).
> >Our enabling legislation also mandated an advisory committee, which met
> >with some regularity for almost ten years (from 1986 to 1995) until the EOP
> >statute expired and wasn't renewed.   Our legislature approved renewal, but
> >our Governor said we could do the same things without enabling legislation.
> >So he vetoed it, and the Legislature didn't want to challenge the veto of a
> >relatively insignificant bill.   (In fact, Hawaii's legislature has
> >overridden a veto only once since statehood in 1959!)   Not surprisingly,
> >nothing has happened since because it is now left up to the discretion of
> >the Governor's Economic Development director.    He is a mainstream
> >economist who thinks ownership doesn't matter.    The enabling statute was
> >amended in the late 80s to add the importance of worker participation, but
> >that didn't matter either in the sense that the program never had any
> >dedicated funding or staff.   I did most of the staff work on a volunteer
> >basis.
> >
> >As a result, I think if a subnational program in the U.S. could do only one
> >thing, it should be to accurately--and annually--identify and notify
> >business owners approaching retirement.   If done in every state, I think
> >this could do more than anything else on the subnational level to broaden
> >ownership in the U.S. at present.   Our one attempt at this in Hawaii about
> >ten years ago was relatively ineffective, in part because the direct mail
> >firm we hired to develop a mailing list said it was difficult to identify
> >owners by age.   I thought perhaps Ohio had perfected this, but John Logue
> >has told me they, too, have this problem.   Nevertheless, it is my
> >impression that OEOC still has done this much more effectively than anyone
> >else so far.
> >
> >So, in summary, I agree with your criteria below as the minimum a
> >meaningful program should be measured by--with regular and successful
> >identification of retiring owners being the key.   You may want to ask John
> >for a short summary of how they identify retiring owners, or at least list
> >him as a "how-to" reference along with your benchmarks if appropriate.   I
> >also think Jim Houck mentioned the importance of enabling legislation, and
> >I agree.    Even though it cannot guarantee the survival of a program, it
> >can help.    But I think it should be relatively specific in terms of what
> >the program can do so it is not left up to the discretion of each new
> >gubernatorial appointee.   I seem to recall someone was working on model
> >state legislation (was it Maine?), which also might be a good "how-to"
> >reference.
> >
> >
> >
> >
> >
> >                     Sara
> > Lawrence
> >                     <sara@cfed.org>         To:
> > "'EOsubnat@cog.kent.edu'"
> >                     Sent
> > by:                 <EOsubnat@cog.kent.edu>
> >                     owner-eosubnat@co       cc:
> >
> >                     g.kent.edu              Subject:     state EO
> > programs
> >
> >
> >
> >
> >                     10/23/01 04:27
> > AM
> >                     Please respond
> > to
> >                     EOsubnat
> >
> >
> >
> >
> >
> >
> >
> >
> >
> >Hello,
> >I would greatly appreciate any feedback on the following:
> >
> >We are working on a project at the Corporation for Enterprise Development
> >(CFED) benchmarking outcomes and policies at the state level that are
> >promoting asset building and asset protection for state residents.  Within
> >this "Assets Report Card" we are including state policies that promote
> >business capital as one set of asset building strategies.  Within business
> >capital, one of our measures evaluates  employee ownership programs at the
> >state level.
> >
> >In this measure, we want to make sure that the program meets a certain
> >threshold, so that we aren't praising a state that has an EO program that
> >isn't good, or effective.
> >
> > From reading John Logue's recent article, I picked these out as
> >requirements
> >for a quality EO state program:
> >
> >-disseminates info
> >-provides assistance with succession planning
> >-encourages employee participation
> >
> >Do you think this is a decent standard, or do you have any suggestions on
> >what we should or should not consider in determining a threshold for a
> >quality EO program?  The difficulty here is that we want to define a
> >standard for a quality program, yet we don't want to overwhelm
> >state policymakers with requirements that seem impossible for state
> >officials to consider.
> >
> >The end result of our project will be a set of criteria, where we can
> >"check" or give credit to a state for having these elements in their EO
> >program.
> >
> >Suggestions on what you consider essential for an effective EO program at
> >the state level would be greatly appreciated.
> >
> >Sincerely,
> >Sara Lawrence
> >
> >
> >Sara Lawrence
> >Corporation for Enterprise Development
> >123 West Main Street, 3rd Floor
> >Durham NC 27701
> >919.688.6444
> >http://www.cfed.org