Corey Rosen
Several California Assembly and Senate members have written letters to the leaders of the Assembly and Senate budget committees urging inclusion of a $36.5 million appropriation to fund a one-time effort to support employee ownership in the state. So far, the proposal has not generated any opposition. The Senate and Assembly letters can be found here.
Corey Rosen
New York has traditionally been a state where it is difficult to operate as a majority ESOP-owned engineering, architectural, landscape architectural, or land survey firm. Existing law requires that a majority of the owners be licensed professionals. Following a 60-0 vote on May 4, the New York Senate passed S. 5261 a bill that would allow majority-owned ESOPs to qualify under New York corporate practice rules for these firms if 75% or more of the company’s voting trustees or ESOP plan committee (often the board of directors) are members of the profession.
Corey Rosen
Twenty-five of the largest private companies as ranked by Forbes (219 in all) are employee-owned. Twenty-one of these have ESOPs, two have profit sharing plans that work like ESOPs, one is owned by a trust for employees, and one provides phantom stock to all employees. The companies are ranked by sales. Nine of the companies are supermarket or convenience store chains, and six are in construction. Companies had to have $2 billion or more in sales to be in the list.
Corey Rosen
Update: Since we published this article, H.B. 2246 the Senate Calendars committee failed to allocate floor time to this bill, effectively ensuring that it will not be acted on during this session.
Corey Rosen
ESOP plan administration committees are set up by companies to oversee ESOP operations. Depending on the committee's charter, it can appoint and monitor the ESOP trustee; resolve questions concerning allocations, vesting, eligibility, distributions, and other plan operational issues; make sure appropriate records are kept and passed on to the third-party administrator (TPA); and interpret plan provisions, among other possibilities. Not all ESOPs have these committees. These functions may be performed by the board of directors.
Corey Rosen
The Trudeau government has proposed a new budget that contains an important provision to look at ways for Canada to set up employee ownership trusts following the models of US ESOPs and UK Employee Ownership Trusts. The budget states that: “Employee ownership trusts encourage employee ownership of a business, and facilitate the transition of privately owned businesses to employees. Both the United States and the United Kingdom support and encourage employee ownership through these types of arrangements. Budget 2021 announces that the government will engage with stakeholders to examine what barriers exist to the creation of employee ownership trusts in Canada, and how workers and owners of private businesses in Canada could benefit from the use of employee ownership trusts.”
Corey Rosen
A new report by the Aspen Institute, Race and Gender Wealth Equity and the Role of Employee Share Ownership, urges the adoption of a series of initiatives to use employee ownership to address race and gender inequality.
Corey Rosen
In its report "A Job Quality Agenda for the Next Administration," the Aspen Institute, a leading nonpartisan think tank, joined the Center for American Progress, Council of Economic Advisors member Jared Bernstein, and others to “Promote employee ownership and worker cooperative models, which have been shown to have a positive association with quality jobs, by offering technical assistance and access to appropriate financing to support transitions to employee ownership, as well as new business development that includes some form of employee ownership. Funds could be made available to state employee ownership centers, experienced nonprofit organizations, and interested Small Business Development Centers to raise awareness about different employee ownership models among small- to medium-sized businesses and to extend technical assistance and facilitate financing.”
Corey Rosen
Forty-six of the 78 companies that have stock on the recently released Fortune 100 Best Companies to Work For list for 2020 have some form of broad-based employee ownership plan, the highest percentage yet. Twenty-two of the companies on the list are law or accounting firms, nonprofits, or a consumer cooperative and have no stock for employees to own. This is the highest percentage yet on the list of such firms with no stock, but normally about half the companies on the list do have employee ownership plans.
