Employee owned trucking company question

How is it a scam? You are given shares of company stock (as opposed to buying them at a discount) and when you separate they pay you either a lump sum or a series of payments, in accordance with your vesting.

 

My understanding is most employee owned companies, the employees own stock that is non- voting which degrades the value. Why would you want to own stock that has no rights. Scam, in my opinion.

 

I say scam because all the real advantages are for the business, not the employee. There may be companies out there that have implemented other policies along with employee owned that make it different but employee owned by itself isnt enough. The original owner gets a boost in productivity and the employee gets a retirement plan thats not diverse. If having all your money invested in a single company was a good idea there would be 401k and ira plans doing the same thing.

 

Free money isn't an advantage for the employee?

As if that's a bad thing?

I don't think that's a retirement plan, I think it's just an Employee Stock Ownership Plan.

I went and checked PTL's website and they offer a 401(k) plan with a company match. Anybody at any company would be a fool not to take full advantage of the company match. And yes, their investments should be diversified.

 

Employee owned is a retirement plan. The fact people dont know that is part of the scam. If you consider it free money, we wont see eye to eye on much.

 

I didnt know that. Thanks for the update.

 

I'm not sure why you're saying it's a retirement plan, unless it's simply marketed that way. But as far as I know it's not treated like a retirement plan for tax purposes.

edit: after doing some research, I discovered that the IRS does consider an ESOP to be "an IRC section 401(a) qualified defined contribution plan". Therefore, I retract the statement I made immediately above this one.
source: Employee Stock Ownership Plans (ESOPs) | Internal Revenue Service

Do you also think that the employer contribution to an employee's 401(k) isn't free money?

 

I think Big G is another one of those employee owned places.