Whether employees have a right to vote on the sale of a company actually comes down to the form of the transaction. Learn more in the video.
The Sale Transaction
If the sale transaction is a purchase of the stock held in the ESOP, that is actually an investment decision that the trustee makes and the participants don’t have a right to vote. On the other hand, if the transaction is a sale of all of the assets of the corporation, the statute specifically says that the ESOP trustee must request participants to give it directions on how to vote shares in their account.
Strictly speaking, even in that situation, the participants are directing the trustee how to vote the shares in their account. They are not directly voting the shares. Ultimately, the ESOP trustee has to determine whether those directions are prudent to follow and make the voting decision itself.