Quick Read
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JPMorgan Chase (NYSE: JPM) gained over 1,300% since 2000 while Enron hit zero, showing no worker can predict which employer survives.
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Charles Prestwood retired with $1.3 million in Enron stock; 20 months later only $8,000 remained, forcing him to later sell family land to survive.
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Enron executives sold shares while telling employees performance had ‘never been stronger,’ then locked workers out of accounts as the stock collapsed.
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$1.3 Million at Retirement, About $8,000 at the Hearing
A Texas man retired in October 2000 at 62, after more than three decades of work. He held $1.3 million, all of it in his employer’s stock. Testifying before senators on June 19, 2002, roughly twenty months later, he said about $8,000 stayed.
His employer was Enron. Charles Prestwood of Conroe, Texas, testified that he spent 33 1/2 years building the company, mostly in the field. He started with Houston Natural Gas, which Enron later acquired, and he was a field worker, far from where strategy was set and the books were kept.
What Enron Told Its Workers
Prestwood testified that an internal publication sent to employees in early 2001 reported an 89% shareholder gain. The chairman’s August 14, 2001 email to staff called Enron “one of the finest organizations in business today” and said that “performance has never been stronger.”
A Congressional Research Service report found that 62% of the 401(k) plan’s assets were in Enron stock at the end of 2000, with employees having bought 89% of that stock themselves. As the stock fell, employees were locked out of their accounts from roughly late October to mid November 2001.
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From $90.75 to $0.26
Enron stock peaked at $90.75 in August 2000. According to Senate testimony, shares traded at $81.38 on January 25, 2001, and at $11.16 on October 30, 2001. They closed at $0.26 on November 30, 2001, and Enron filed for Chapter 11 on December 2, 2001.
