Transcript how_do_oklahoma_cooperatives_manage_equity.ppt

How Do Oklahoma Cooperatives
Manage Equity?
Phil Kenkel
Bill Fitzwater Cooperative Chair
Oklahoma State University
Advanced OCCD March 30, 2005
How Do We Redeem Equity?
Equity Redemption Systems in Oklahoma
Pool
5%
Estate
42%
Patron Age
29%
Percentage
3%
Stock
Discount
3% 18%
Patron Age
Percentage
Stock
Discount
Estate
Pool
Innovative Systems
Pool system with patrons over the trigger
age receiving 20% of their balance for 5
years
 All patrons receiving 2% of total equity
 Several cooperatives set their redemption
budget equal to their total amount of cash
patronage

Corporations and Trusts
Stock
18%
No System
66%
Look
Through
16%
Stock
Look Through
No System
Corporations and Trusts
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Some cooperatives redeem when the principle
owner is eligible
Some cooperatives only redeem equity when the
trust/corporation is dissolved
Some allow equity to be transferred to children
Some redeem a portion of equity based on age and
the percentage ownership in the corporation
Many cooperatives do not have a formal policy
Move Aways and Discontinued Farming
3 Year Delay
8%
Immediately
29%
No Preference
No
Preference
63%
Immediately
3 Year Delay
Membership Shares
Low = $10
 High = $1,000
 Average = $143
 Most allow patrons to earn their
membership share

Conclusions
Age of patron is the most common system
followed by age of stock
 Many cooperatives are currently only
redeeming estates
 Lots of variation in the details
 Many managers indicated they were
interested in looking at alternative systems
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