UAL ESOP Wants to Sell More Stock

November 26, 2002 ( - Shares of UAL Corp. were down about 8% Tuesday after trustees of the company's employee stock ownership program (ESOP) said they want to nearly double the number of shares they will sell by the end of the year.

In a filing with the US Securities and Exchange Commission (SEC) as reported by Crain’s Chicago Business, the ESOP’s trustees said they want to sell 9.6 million more shares, in addition to the 12 million shares the ESOP announced it would sell in September.

Some 11.4 million of those shares already have been sold, generating $25.7 million in proceeds for the ESOP, according to the SEC filing.

In afternoon trading Tuesday, shares of UAL, parent of United Airlines, were trading at $3.51, down from Monday’s close of $3.83.

Raymond E. Neidl, an analyst with Blaylock & Partners LP, said the ESOP’s announcement likely contributed to the stock’s decline, although he noted that the entire market was down Tuesday.

In August, employees on the ESOP committee delegated their investment management responsibility to Boston-based State Street Bank & Trust Co. to ensure that decisions are made independently and in the best interests of plan participants.

State Street’s September announcement that it planned to sell 12 million shares when the stock was at such a low price angered many employees. (See  State Street Selling UAL Stock ).

The appointment mirrored a similar action by USAirways, which tapped Aon as an independent fiduciary for the company stock in its plan (see  Laying Off Liability ).