US Sugar Cheats Its Workers, Execs Get Rich

In 1993 employees of US Sugar voluntarily swapped their pension plans for company stock options. I could have told them it was a mistake.

Thousands of workers at U.S. Sugar thought they were getting a good deal when the company shelved their pension plan and gave them stock for their retirement instead. They had a heady sense of controlling their own destiny as they became the company’s biggest shareholders, Vic McCorvey, a former farm manager there, said.

“It was always stressed to me, as manager of that 20,000-acre farm, that the better you do, the higher your stock will be and the more retirement you could get,” Mr. McCorvey said. “That’s why I worked six and seven days a week, 14 hours a day,” slogging through wet and buggy cane fields, doing whatever it took.

Now that many U.S. Sugar workers are reaching retirement age, though, the company has been cashing them out of the retirement plan at a much lower price than they could have received. Unknown to them, an outside investor was offering to buy the company — and their shares — for far more. Longtime employees say they have lost out on tens of thousands of dollars each and millions of dollars as a group, while insiders of the company came out ahead.

Yup. Not much of a surprise for people who remember the way the corporatocracy stole millions of workers' pensions between 1988 and 1992. It's just a variation on an old theme: convince your employees that getting stock is an incentive because if they're invested, you control the stock. There are all kinds of games you can play to rip off that money, games that are less easy (and more dangerous, legally) to play with pension funds.

Well, this time, the employees, unlike the goats of the late 80's who were taken by surprise, aren't just going to stand by and watch their futures stolen by corporate thieves in their own company. They're suing.

Some former U.S. Sugar employees have since filed a lawsuit accusing company insiders of cheating them out of money that was rightfully theirs. Throughout, the worker-owners have been shut out of information about the company’s finances and unable to challenge management’s moves or vote because their shares were held through a retirement plan, not directly.

Employee stock option plans have been a popular replacement for pension systems since Bush I, which means there are a lot of other companies who could be in the same fight with workers whose retirements they screwed up for their own gain. And don't make the mistake of thinking US Sugar is the only corporate thief out there.

Thousands of companies, large and small, embraced the ensuing tax benefits by creating employee stock ownership plans, known as ESOPs. U.S. Sugar, the largest American producer of cane sugar, took its stock off the public market in the transaction that created its ESOP, in 1983.

Nearly 95 percent of the country’s 10,000 ESOPs are now at privately held companies, like U.S. Sugar. Because their shares are not publicly traded, there is no market price. So workers cash out shares without knowing what the price would be on an open market.

That's not all they don't know. Typically, the corpo's who have ESOP's don't bother to tell their employee stock owners anything at all about what they're doing with the company, let alone help them decide what the company's direction will be. It is an "ownership" plan in name only, basically a scam to get people to work longer and harder for rewards the executives will then steal for themselves. Which is how US Sugar employees feel fer shur.

The former employees accuse U.S. Sugar insiders — descendants of the industrialist Charles Stewart Mott — of scheming to enrich themselves by buying back workers’ shares on the cheap. They say “the principal actor” is William S. White, the company’s longtime chairman, who is married to Mr. Mott’s granddaughter. They also say he improperly exerted his influence as chairman of the Charles Stewart Mott Foundation, whose mission is to advance human rights and fight poverty and which holds a big stake in U.S. Sugar.

“They robbed us,” said Loretta Weeks, who worked in U.S. Sugar’s lab, testing sucrose levels in cane juice. “It’s like the last 15 years we were working for nothing.”

It isn't like that, it is that. They thought they were going to increase their pension pay-outs when in fact they were simply handing them over to the company execs.

When corporate smooth-talkers start trying to tell you how rich you're going to be if you just do what they want, BEWARE. What they really mean is how rich you're going to make them by being a docile little sheared sheep. I know we want to trust our employers but we have to be realistic: they're liars, cheats, and thieves. THEY CAN'T BE TRUSTED.

Don't be a sheep. Don't trust them. Look out for each other.