Corey Rosen
The US Department of Labor (DOL) released its 2026 rule list, which states that it will issue ESOP valuation regulations in November 2026. The regulations are required by the SECURE 2.0 Act of 2022. The DOL issued proposed regulations in December 2025, but they were rescinded along with all other pending regulations when the new administration took office the next month.
Corey Rosen
A new NCEO task force of trustees is examining how an ESOP company’s repurchase obligation should affect its stock value. The repurchase obligation can be a significant financial cost for ESOP companies, but this liability is currently not reflected on the balance sheet or income statement. Historically, valuation firms ignored the potential impact of repurchase obligations, arguing that the company could always simply be sold and the obligation would go away. The effect of this in some companies was that they were forced to sell to meet their repurchase obligations, whereas they would not have had to if the share price had been adjusted all along for the ongoing liability. In a few extreme cases, companies that had rapid cyclical growth followed by cyclical decline have found that their repurchase obligations to employees who left at a high point forced them into bankruptcy.
Corey Rosen
Study also finds that companies emphasize ownership culture is the best tool for retention and recruitment.
Corey Rosen
Voya Financial, a leading retirement, employee benefits, and investment management company, reports in a new survey that 70% of consumers “would more likely support a business that enables employee ownership." Eighty-six percent say it’s important that profits from local businesses stay in the community.
Corey Rosen
New Jersey bill A5016/S4218, which would establish a program in the state Economic Development Administration to “encourage employee ownership awareness and provide funding and advisory support,” has now passed both chambers of the state legislature. The bill makes permanent a program created under former Governor Phil Murphy in 2024 to provide technical assistance and outreach and to help defray the costs of feasibility studies for companies considering employee ownership transitions. The current governor, Mikie Sherrill, is expected to sign the bill.
Corey Rosen
The Rhode Island Senate unanimously passed S. 2922, which would create the Rhode Island Center for Employee Ownership (RICEO). According to the bill text, “the purpose of the RICEO will be to secure resources, provide technical assistance, and serve generally as a concierge service both to legacy business owners and worker owners interested in transitioning a small business to an appropriate employee-owned business model.” Worker cooperatives, ESOPs, and companies where a majority of the stock is owned by an employee ownership trust are all explicitly mentioned as examples of employee ownership, but the RICEO could provide assistance for other models.
Corey Rosen
According to an analysis posted on X by Hill.com founder and CEO Andrew Benson, widely cited in the New York Times and other news outlets, more than 4,000 current and former employees of SpaceX now have more than $1 million in stock (400-plus having $100 million or more), and many others among SpaceX's 22,000 employees have large amounts of stock as well after the company’s record-breaking IPO.
Corey Rosen
In 2024, the New Jersey Economic Development Authority, funded by $2 million from the State Fiscal Year 2024 Appropriations Act, created a technical assistance program and outreach initiative led by Rutgers' Institute for the Study of Employee Ownership and Profit Sharing to promote employee ownership as a tool for business transition. Governor Phil Murphy proposed a $6 million fund for feasibility assistance grants for the program, but it was not approved. The $2 million program has been available to help defray the costs of feasibility studies.
Corey Rosen
A new NCEO paper, Why Selling to an ESOP Costs Less than Selling to Another Buyer: Breaking Down the Cost Differences (PDF; also see the embedded version below) takes a detailed look at the various cost components of selling to an ESOP versus selling to another buyer. The paper was based on conversations with multiple people involved in ESOPs and in exit planning generally. The bottom line is that selling to an ESOP usually costs between 2% and 4% of the transaction price, while selling to another buyer usually costs between 4% and 9%. Of course, these are general findings, and some deals cost less, while others cost more. The cost as a percentage of the transaction value is smaller in larger deals and in deals with less complex structures and financing.
