Employer stock held in ESOP is registration-type security. With regard to pass-through voting, do all items that are voted on at a Board meeting have to be voted on by participants in the ESOP? Is there any type of de-minimus exception? Can nonvested participants with employer stock allocated to their accounts be excluded from voting? :confused:

Hi JONB ---

There are voting rights to be "passed through" to ESOP participants only when a matter is presented for a vote by shareholders of the company. Most matters voted on at a board of directors meeting are not subject to shareholder approval.

When a "pass-through" of voting rights is required under IRC section 409(e), it applies to all shares allocated to participants' accounts...whether vested or non-vested.