New Bill Would Ease Reporting Requirements on Companies with Employer Stock Plans

The Encouraging Employee Ownership Act would increase the current $5 million cap on the amount of stock closely held companies can award employees before triggering certain SEC reporting requirements to $20 million. The disclosures include information such issues as income statements and shareholder lists. The bill was introduced by Pat Toomey (R-PA) and Mark Warner (D-VA). ESOPs are already exempt from these rules because the ESOP is considered one shareholder, but companies with stock options, employee stock purchase plans, restricted stock awards, and similar plans all would be affected.