Employee Ownership Blog

Loren Rodgers

DOL Employee Ownership Head Reinstated

On March 7, the American Federation of Government Employees (AFGE) was notified that all probationary employees at the Department of Labor who received termination notices on February 21, including Employee Ownership Division chief Hilary Abell, would be reinstated. The reinstatement will be effective as of Monday, March 10, according to the Plan Sponsor Council of America.
 
Lisa Gomez, the former head of the Employee Benefit Security Administration (EBSA), said, "With the decades of experience she brought to the role, Hilary's contributions to EBSA's Division of Employee Ownership have built a critical and meaningful connection between the Department of Labor and the employee ownership community. Without her reinstatement, that foundational work would have been needlessly lost."

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Corey Rosen

Seventeen of the Largest 100 Private Companies Have Employee Ownership

Seventeen of the Forbes 2024 list of the largest 100 privately held companies (ranked by sales) have some form of employee ownership. Five are 100% ESOP-owned, four are minority ESOP-owned, two have profit-sharing plans primarily invested in company stock, one is an employee ownership trust, and one is a broad-based partnership available to employees at all levels. Supermarkets, convenience store chains, engineering, and construction are the most common industries among the employee ownership companies. We also compile a list of the largest employee-owned companies for our yearly Employee Ownership 100. That list includes only companies for which we have reliable external verification that their plans are broad-based, and it also focuses on majority and 100% employee-owned firms and the active participants they cover.

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Scott Rodrick

DOL Employee Ownership Head Laid Off

Update: As of March 7, the recently terminated head of the Division of Employee Ownership is to be reinstated March 10.

The National Association of Plan Advisors (NAPA) reports that Hilary Abell, who in July 2024 was appointed as the head of the Division of Employee Ownership at the Employee Benefits Security Administration (EBSA) within the U.S. Department of Labor (DOL), has been terminated as part of a wave of actions across the U.S. government.

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Corey Rosen

NY Bill Would Examine Certifying Employee-Owned Companies as Minority- and Women-Owned

New York Assembly Bill 5649, authored by Democratic Assembly Member Stefani Zinerman, directs the New York State advisory panel on employee-owned enterprises to evaluate barriers to certification as minority- and women-owned businesses (MWBEs) for employee-owned businesses and recommend strategies for retaining the MWBE status of existing certified business enterprises when they become employee-owned. The commission was established in 2022 to report on how the state could encourage employee ownership but has yet to issue any recommendations. The NCEO has an article on ESOPs and preferred-status certification with background information and recommendations.

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Corey Rosen

New Data on ESOP Companies Acquiring Non-ESOP Companies

The NCEO has completed the most comprehensive review to date of publicly available information about ESOP companies purchasing non-ESOP companies. The review is consistent with anecdotal reports that buying other companies has become an important source of growth for closely held ESOP companies.

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Corey Rosen

Trump Selects Daniel Aronowitz to Head EBSA

President Donald Trump selected fiduciary insurance company executive Daniel Aronowitz to head the Employee Benefits Security Administration (EBSA). Aronowitz currently is the head of Encore Fiduciary (formerly Euclid Fiduciary). The company provides fiduciary insurance, fidelity bonds, cybersecurity insurance, and fiduciary insurance consulting. He is the author of the Fiduciary Liability Insurance Handbook. The book’s only mention of ESOPs is to say that this kind of fiduciary insurance is more costly than that needed for other retirement plans.

If approved by the Senate, Aronowitz would succeed Lisa M. Gomez and work under Lori Chavez-DeRemer, Trump’s pick for Secretary of Labor, who is also up for Senate approval. Chavez-DeRemer has been an ESOP advocate; Aronowitz does not appear to have taken any public position on ESOPs. 

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Corey Rosen

Wisconsin Bill Would Create Employee Ownership Incentives and Outreach Program

Senate Bill 21 (PDF), a bipartisan bill introduced in both the Wisconsin Senate and Assembly, would create a tax credit of up to 70% of the costs of converting to a worker cooperative and 50% of the cost of adopting an ESOP, with a credit cap of $100,000. Up to a total of $5 million in credits could be allocated each year, and any unused allocation could be carried forward.

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