Teamsters Demand Board Protect Workers In ESOP Deal At Company's Annual Meeting
WASHINGTON, May 9, 2007 /PRNewswire-USNewswire via COMTEX/ --
Teamsters attending the Tribune Company's annual meeting of shareholders today questioned the company's board of directors about major flaws in the employee stock ownership plan (ESOP) takeover bid by Chicago real estate mogul Sam Zell.
The ESOP plan proposed by Zell requires that employees assume a disproportionate amount of the financial risk without any say in the governance of the operating company. Under the proposed deal, the ESOP will own at least 60 percent of the company's stock.
"This plan is a perversion of what ESOP's were designed to do -- namely to empower workers as owners," said Jim Hoffa, General President of the International Brotherhood of Teamsters, which represents about 2,000 Tribune workers. "This structure makes the employees shareholders in name only. They should be guaranteed the right to elect the trustee of the ESOP trust and the board of the operating company."
Zell's financial risk will be minimized by tax breaks and "phantom" stock ownership. Teamsters raised concerns that this structure fails to closely align Zell's interests with those of the company and its worker-owners. Teamsters also questioned whether the use of this synthetic equity could violate IRS anti-abuse rules.
"This transaction, with its heavy debt load, creates an enormous financial burden on the Tribune's workforce -- union and non-union alike," Hoffa said. "No one has more at stake than the Tribune workers, whose jobs and retirement security depend on the survival of this company. We will fight to ensure that they have a meaningful voice at the table as majority shareholders in the company."
Founded in 1903, the International Brotherhood of Teamsters represents 1.4 million hardworking men and women in the United States and Canada.
SOURCE International Brotherhood of Teamsters