Loren Rodgers
New research released on October 19, 2023 on employee ownership in the United Kingdom – the People Powered Growth Report – suggests the UK’s employee ownership sector is outperforming the UK’s national productivity while contributing to several measures of employee and community wellbeing. The report also notes that the number of employee-owned businesses in the UK increased by 30% over the last year.
Lindsay Isaac
Employee Ownership Month provides us with an opportunity to celebrate, reward, and educate employee-owners and the companies they work for. Stepping back, it’s helpful to understand the history behind the celebration and why it matters today. That’s where this month’s Download (solutions-focused, member-exclusive content delivered to your inbox monthly) comes in. The October resource is a two-page handout* that provides the background and context for Employee Ownership Month (available in Spanish on the aforementioned Download landing page)*.
Loren Rodgers
Artificial Intelligence will change how businesses operate, but is its impact any different in an employee-owned company? The CEOs of the ESOP companies that participate in the NCEO’s CEO network discussed opportunities and threats, and this blog post extracts a few highlights from their confidential conversations.
Timothy Garbinsky
Apis & Heritage Capital Partners (A&H), a middle-market mezzanine debt firm with the mission of closing the racial wealth gap using employee ownership, has released its first annual impact report, highlighting some of the successes of its initial Legacy Fund I. A&H saw its first fund oversubscribed by investors and foundations, exceeding its initial $50 million cap by over $8 million. This fund will help A&H further its mission of converting businesses that primarily employ workers of color to employee ownership.
Scott Rodrick
Ron Kind (D-Wis.) and Erik Paulsen (R-Minn.), both former U.S. representatives who served on the House Ways and Means Committee, authored an editorial in The Hill, Employee ownership could be the key to solving our retirement security crisis, pointing out that "At a time when retirement seems out of reach for many Americans, there is clear and convincing evidence that people who work for private businesses with Employee Stock Ownership Plans . . . have far greater retirement security than the average American." Citing recent research from Ernst & Young on S corporation ESOP participants and NCEO research on ESOPs and retirement security, Kind and Paulsen note how ESOPs help workers; at the same time, they cite a report from Matrix Global Advisors and an NCEO analysis of ESOP litigation to criticize regulatory uncertainty around ESOPs that makes it more difficult to establish an ESOP. They express hope that the project at the U.S. Department of Labor (DOL) to establish clearer guidance for ESOPs will "finally put to bed the regulatory uncertainty that has cast a shadow over employee ownership for decades," stating that the ESOP community is ready to work with the DOL and the administration "to usher in a new era of employee ownership."
Loren Rodgers
Annual elections for our board of directors will take place in January. NCEO members in good standing are invited to nominate themselves or other members during the nomination window, from now through December 8.
Timothy Garbinsky
Our friends at the Employee-Owned S Corporations of America (or ESCA) have reported that they've had constructive dialogue with the IRS regarding their recent press release on ESOPs. Our understanding is that the press release was intended as just that-- a press release and not an official notice of any sort. This press release was meant to alert interested parties generally and the employee ownership community more specifically that they've identified what they've termed a "questionable transaction."
Emalie Martzall
On September 5, the Pennsylvania Center for Employee Ownership (PaCEO), in conjunction with the Pittsburgh City Council and the Heinz Endowments, launched the U.S.’s first citywide task force on employee ownership. The Pittsburgh Citywide Task Force on Employee Ownership is now in the process of reaching out to roughly 30,000 businesses in the Pittsburgh region with the message of employee ownership through a variety of channels. The channels include email, direct mail, social media, radio ads, podcast ads, television, and a podcast episode on CityCast Pittsburgh on September 20. The last phase of the task force is a series of in-person informational sessions co-hosted by the Pennsylvania Center at various community groups around the city. These informational sessions will begin next month and will continue through the remainder of 2023 and into 2024.
Corey Rosen
On September 6, Missouri Governor Mike Parsons signed S.B. 20 (also see the PDF of the bill text), one of whose provisions makes permanent a law enacted in 2016 that provides a 50% reduction in state capital gains taxes for business owners selling to an ESOP as long as the ESOP owns at least 30% of the company after the sale. The law was originally set to sunset in 2023, but this new law removes the sunset provision, making it permanent. Iowa passed a very similar law in 2012
