Loren Rodgers
It has been just over 100 days since the Employee Ownership Expansion Network and the National Center for Employee Ownership announced the official collaboration of our organizations at the NCEO conference in Kansas City. Some highlights of the first 100 days of our joint work include:
Madelyn Hammack
Last week, I had the opportunity to attend the first day of the 2023 National Employee-Owner Summit in Downers Grove, Illinois. The two-day event, which is a collaboration between the NCEO and the OEOC (Ohio Employee Ownership Center), is moderated by the OEOC and offers non-managerial employee-owners the opportunity to learn from and interact with their peers from other ESOP companies through informational sessions, structured exercises, small group discussions, and even games.
Corey Rosen
ESOP advocates have long urged the Department of Labor (DOL) to establish clear guidelines for adequate consideration requirements in ESOP transactions. The WORK Act (part of the SECURE 2.0 Act of 2022) requires the DOL to set guidelines for ESOP valuation. Simultaneously, the DOL has been facing a formal petition under the Administrative Procedures Act (APA) brought by the ESOP Association calling for the same formal rulemaking. The DOL denied the petition under the APA but nonetheless agreed to a formal public notice and comment rulemaking with a process that includes publishing their draft regulation through public notice and the opportunity for stakeholder comments. The agency must then respond to those comments before issuing any final regulation.
Loren Rodgers
On August 9, the IRS issued a press release warning about tax avoidance in employee stock ownership plan (ESOP) transactions. It is not clear what prompted the memo or whether there are any specific transactions that the IRS is investigating.
Corey Rosen
Plan will start at 42% of ownership and may move to 100% over time
Loren Rodgers
The IRS issued a news release on August 9 stating that as part of “an expanded focus on ensuring high-income taxpayers pay what they owe,” it was warning “businesses and tax professionals to be alert to a range of compliance issues that can be associated with Employee Stock Ownership Plans (ESOPs).”
Nancy Wiefek
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The 2023 compensation survey is now open.
Jaymie Oviedo
We are excited to present our highly anticipated 1.5-day seminar Is an ESOP Right for You? in New Orleans from October 24–25, 2023. As the ESOP landscape grows, this event aims to equip entrepreneurs, business owners, and HR professionals with in-depth knowledge on ESOP transaction structures, plan design, financing, and more.
Corey Rosen
The WORK Act seemed to be a major win for employee ownership advocates. The law directed the Department of Labor (DOL) to create an Employee Ownership Initiative office to provide education on employee ownership (which it has now done) and authorized $50 million in funding over five years, starting in fiscal year (FY) 2025, for state employee ownership outreach and education programs. Although the WORK Act authorized the expenditures for the state programs, funding comes through a separate appropriation process. On July 27, the Senate Appropriations Committee passed a $13.5 billion FY 2024 DOL appropriation bill that says nothing about employee ownership in the bill itself, although the accompanying report directs the DOL to create the Employee Ownership Initiative and to issue guidelines on ESOP valuation (something the DOL has also already committed to do). The $9.8 billion House FY 2024 DOL appropriation bill also has no provisions on employee ownership; unlike the Senate report, the House committee's bill summary does not mention employee ownership. Because the DOL has already committed to the programs described in the Senate bill, it is unclear whether what the House did matters.
