NewsWire--AUGUST 13, 1996
TOPIC: Agency Relationships,
Employee Stock Ownership
SOURCE: "Should Avis
Try Harder--For Its Employees? Critics Say A Proposed Sale Could
Shortchange Worker-Owners," by Aaron Bernstein, Business
Week, August 12, 1996, 68-69.
SYNOPSIS: The article
discusses the employee stock ownership plan (ESOP) adopted at
Avis, and the controversy surrounding the recent decision by Avis
management to sell the company to HFS Inc. At issue is the distribution
of the selling price among Avis employee-owners, management, and
Avis' other shareholder, General Motors. The article offers an
opportunity to discuss ESOPs, their potential impact on the agency
relationship, and some interesting new agency problems that arise
as the result of an ESOP.
DISCUSSION QUESTIONS:
1. What is an ESOP?
2. What are some advantages of ESOPs?
3. What are some disadvantages of ESOPs?
4. How has the ESOP worked at Avis?
Return to news index
|
