Moral Support From ESOPpers

By: A.J. Carter
Newsday
April 21, 2003

One "p" or two?

It has been Dick Lippe's most difficult decision so far as the de facto executive director of the Long Island ESOP Association, a fledgling group formed to sing the praises of an employee benefit program that's gaining in popularity nationwide.

Invitations are being sent to a May 20 seminar at the Garden City Hotel, where buttons asking the question "Have you ESOPped?" will be passed out. Lippe's hoping for at least 50 positive responses from a list being drawn up by the participants at a planning meeting last week: Lippe and Ira Halperin from the law firm, Meltzer Lippe & Goldstein; Adam Weisman from Deloitte & Touche; Pat Janco from Citibank; Peter Goldsmith of LISTnet; and a representative from Sterling and Sterling, an insurance company.

What is an ESOP? The letters stand for employee stock ownership plan, and in its simplest form, entails a company setting aside stock or some portion of company ownership for its employees as a sort of retirement plan.

Talk to Lippe, and he'll rattle off the benefits, tax and otherwise, for a company, public or private, and tell you the many reasons why he thinks an ESOP is better for a company than granting stock options - and, in many ways, better for the employee. "What's good about restricted stock is that unless the company goes bankrupt, it's always going to have a value," he said. Owners of private companies, Lippe said, can gain tax advantages for themselves personally while giving their employees a share of the business. We won't go into more detail, because there's a good chance we'd get it wrong.

Why an ESOP association? "Generally, even senior corporate people have never heard of ESOPs," Lippe said. "We think that this is an overlooked vehicle that speaks to a number of the problems that exist in today's world."

The association is nonprofit, but it would be naive to think that its founders don't hope for some tangible results. As Lippe said, "No one is involved in this from a purely altruistic point of view."

The group already has cleared one major hurdle: whether in turning ESOP into a verb on the buttons, there should be one "p" or two. The answer: Proper grammar and rules of pronunciation require two. "It was an executive decision," Lippe said.