Brainstorming at the Barnstormers

ESOP Association member Jeff Gelburd at Murray Securus in Lancaster, Pennsylvania recently shared the following news with the Association:

“Leaving off from a similar meeting at Restek Corporation last March, Murray Securus hosted a roundtable discussion in July 2015 at Clipper Stadium, home of the Lancaster Barnstormers, an International League Baseball Club.

“Below is a photo taken after our meeting. Attending were, from left to right, Chris Fitterling of Bollman Hat Co., Judy Stoner of Murray Securus, Walter Van Nuys of LB Water Co., Lori Townsley of Murray Securus, Brian Bledsoe of HB McClure Co., Leah Scarsella of Murray Securus Matt Pfeiffenberger, of Murray Securus, Mike Shuey and Pete Rose of Restek Corp., and Jeff Gelburd of Murray Securus.

“Our discussion centered on the balls and strikes of communicating the ESOP within our respective companies and developing a more robust employee ownership culture.

“After the two and a half hour meeting, we then took in a game to see the Lancaster Barnstormers take on the Rockport Blue Fish.

It was a fun night for us all.”

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Brainstorming at the Barnstormer 2

Looking for EOM Ideas?

Here are a few posts that might help.

Download a copy of the EOM Kit

2015 Employee Ownership Month Kit Available!

Talk ESOPs

ESOP Association President Visits Omni Cable

Meet with Your Member of Congress

Congressman Reid Ribble Visits Hatco Corporation

ComSonics Meets with Congressman Goodlatte

Restek Meets with Congressman Glenn Thompson

PPI Meets with Senator Joni Ernst

Travel and Transport Meets with Congressman Ashford

Representative Grothman Visits Priority Sign

Schedule an ESOP Event with Employee Owners

ESOP Company News: Omni Cable Celebrates Vesting Day

Looking for a Good ESOP Learning Tool? The ABCs of ESOPs is It!

ABCs of ESOPs — Are You an ESOP Guru? Be One!


Got Your EOM Poster?

We thought we’d re-blog the EOM poster info…

The 2015 Employee Ownership Month Poster is now available. You can purchase your poster here.

The poster was designed by ASU Group, an employee-owned company located in Okemos, Michigan. The winning poster design was unveiled at the Association’s 38th Annual Conference in Washington, DC. ASU Group’s poster was chosen as the 2015 winner because of the idea it expressed: Flying as a team gives our ESOP wings.  The winning poster also graced the cover of this year’s Employee Ownership Month Planning Kit.

Congrats to the employee owners of ASU Group on the winning design!


August 2015 Link List

2015 Employee Ownership Month Poster Available

2015 Employee Ownership Month Kit Available!

ESOP Association President Visits Omni Cable

ESOP Company News Part 7: Congressman Reid Ribble Visits Hatco Corporation

Moving to the Offense. Touchdown for ESOPs on the Horizon?

ESOP Company News Part 6: ComSonics Meets with Congressman Goodlatte

August 2015  ESOP Report Published

ESOP Company News Part 5: Restek Meets with Congressman Glenn Thompson

August 2015 Outside Board Registry Available

ESOP Company News Part 4: PPI Meets with Senator Joni Ernst

ESOP Company news Part 3: Travel and Transport Meets with Congressman Ashford

ESOP Company News Part 2: Representative Grothman Visits Priority Sign

ESOP Company News: Omni Cable Celebrates Vesting Day

ABCs of ESOPs — Are You an ESOP Guru? Be One!


Moving to the Offense. Touchdown for ESOPs on the Horizon?

Please note, the following article originally ran as the Washington Report column in the August 2015 issue of the ESOP Report, the newsletter of The ESOP Association.

In the first decade or so of the 21st Century, after the perfection of the S ESOP law — which was being abused by one and two person 100% S ESOPs — at the turn of the Century, the general mantra of the Association’s government relation’s message has been: “The best defense is a good offense.” In non-sports terms, the thinking is that when a cause has many members of Congress especially, on key Congressional Committees expressing support for specific laws by openly co-sponsoring proposals to expand those laws, cynics about the specific laws are not likely to “win” their efforts to cut back those laws.

Whether we like it or not, there are still men and women in key policy positions among Congressional offices, and among Executive Branch agencies, that see ESOPs as a waste of tax payer money, as bad retirement savings plans due to lack of asset diversification, and as not real ownership. If these people had a chance, which they would if fewer members of Congress openly supported ESOPs, they would maneuver to severely diminish, or to even eliminate laws to encourage creation and operation of ESOP companies.

Since 1990, they have had no time when a movement to cutback or eliminate pro-ESOP laws appeared; why, because on the advice of former super ESOP champion former Congressman Beryl Anthony, the ESOP community has put forth modest, but meaningful pro-ESOP proposals to expand ESOPs. This defense is the best offense strategy led to the passage of the pro-ESOP S ESOP law in 1996, perfected in 1997, and protected in 2001 from attack.

In this 1990 to 2000 time frame, over 100 members of Congress stood up and publicly proclaimed, “I am for ESOPs!” (More comments about this later in this report.)

Now we have, just after a few months post introduction of S. 1212, and H.R. 2096, 23 Senators and 33 members of the House saying, expand ESOP law. These bills, formally titled “Promotion and Expansion of Private Employee Ownership Act of 2015” have a very positive statement of reasons for encouraging ESOPs as an introduction and three similar sections, with the House bill, H.R. 2096, having an additional fourth provision. The section that has garnered the most attention is to permit sellers of S stock to an ESOP to take advantage of IRC 1042 for deferral of gain of the sellers proceeds. (If law, this provision would trigger a substantial increase in the number of S corporations that hold 30% of the company’s stock, but not 100%.). See to read all provisions.

Last Congress, support for the House version of H.R. 2096 was a factor that recommendations to eliminate special tax rules in the tax reform proposal developed by former Ways and Means Chair Dave Camp (R-MI) kept all positive rules for ESOPs untouched.

Now, this Congress, in this year, the Senate Finance Committee created task forces to study specific areas of the income tax laws, and the task force reviewing ERISA laws did not just propose that the Senate keep current ESOP tax laws, but encouraged the enactment of S. 1212. In other words, the task force was saying, “Let’s not stand pat for ESOPs; let’s have more ESOPs.”

Then on July 29, the Senate Small Business Committee released a proposal to change tax laws impacting small business that included S. 1212, as Title IV of its proposal.

Bottom line, if the ESOP community remains active, focused, and persistent, in getting more members of Congress, House and Senate, to openly support S. 1212 and H.R. 2096, it is doable, probably not this year, a little more likely next year, but really a possibility after 2016, to once again expand ESOPs, which are good for America, good for the communities where ESOP companies are located, and good for companies with ESOPs, and good for employees.

Number one, have your member of Congress see first-hand your ESOP company to learn what being “ESOP” means; and then politely ask, join your colleagues, Democrats and Republicans, liberal and conservative, and make our nation become more capitalistic, with more ownership by more employees. Sounds like big talk? Yes, and doable.

ESOP Company News Part 5: Restek Meets with Congressman Glenn Thompson

Restek Meets with Congressman Thompson

In July, the employee owners of Restek Corporation, located in Bellafonte, Pennsylvania, met with Congressman Glenn Thompson (PA-5) to review H.R. 2096. According to Restek employee owner, Mike Shuey, the Congressman expressed support for the bill. And we are happy to report that Congressman Thompson became a co-sponsor of H.R. 2096 on July 28.

Restek Thompson meeting

Raise the Bar: More Pro-ESOP Bill Sponsors Needed

Please note, the following article originally ran as the Washington Report column in the July 2015 issue of the ESOP Report, the newsletter of The ESOP Association.

No question it was pleasing to have introduced in the House, H.R. 2096, (Promotion and Expansion of Private Employee Ownership Act of 2015), and in the Senate S. 1212 (same title) in late April and early May, with clear cut Republican and Democrat members of the House and Senate as co-sponsors. It is pleasing to see that as of July 7, the bi-partisan support grew, for as of that date, the H.R. 2096 list of sponsors had grown from the original eight to 25 — 17 Republicans and eight Democrats — and S. 1212 had grown from the original 11 to 21 — 11 Republicans and eight Democrats and two Independents, who caucus with the Democrats.

But more support is needed to not only have the provisions of these two bills become law, which would be good, as explained below, but would be very important in making sure what ESOP companies have now that increases their profit after taxes remains the law, in view that sometime in the near future all tax laws will be scrutinized, and many eliminated or reduced.

And the bar we have to measure the support for ESOPs in Congress is the bar set in 1993, when 102 members of the House sponsored pro-ESOP bills, and records indicate the high in the Senate was 29 in 1995. Those numbers made a difference when the Ways and Means Committee in 1996 and the Senate Finance Committee in 1996, without opposition, passed the law permitting S corporations to sponsor ESOPs. [As a general rule, it takes often six to eight years from the day a “new” tax benefit idea is introduced to when the tax committees put the idea into a bill it sends the House or Senate floor.]

To move the Congress to put into law the provisions of S. 1212 and H.R. 2096 that would permit a seller of S stock to an ESOP to defer her/his capital gains tax on the proceeds as the seller of C corporation stock has been able to do since 1985, per the provisions of IRS 1042, and to ease the SBA bias against ESOPs when deciding if a small business that has an SBA preference should continue to have that preference when the ESOP owns more than 50% of the company, there needs to be many more sponsors of H.R. 2096 and S. 1212.

Impossible? No, because there are 124 members of the House and Senate who are ESOP advocates because they have sponsored pro-ESOP bills before this year. So, subtract 46 current H.R. 2096 and S. 1212 sponsors, and there 78 men and women in the House and the Senate that have sponsored bills in prior Congresses that are identical to H.R. 2096 and S. 1212.

ESOP advocates just have to ask, via letter, via an ask during a company visit in August, or a town hall session in August, or at a civic club.

Go to the Advocacy Kit, where there is the suggested letter for co-sponsoring these bills — to get suggested words for the ask.

Resting on laurels because it appears that not having any bad ESOP recommendations in last year’s big tax reform proposal put forward by the former Chair of the Ways and Means Committee, Dave Camp, and recently a task force of the Senate Finance Committee recommended consideration of S. 1212 when it takes up major tax reform legislation in the next two to three years, would be dumb, and dumber.

Let’s raise the bar — let’s have the mark reached in 1993 reached again — let’s expand incentives for creation and operation of ESOPs.

It is doable.

New Center for American Progress Report Touts Capitalism for Everyone

The Center for American Progress, a Washington, DC think tank, released an interesting report today titled:

Capitalism for Everyone

Encouraging Companies to Adopt Employee Ownership Programs and Broad-Based Profit Sharing

By Karla Walter, David Madland, and Danielle Corley

More information and the report can be found here.

ESOP Association President, J. Michael Keeling stated, “We agree with this report that recommends that policy makers need to increase programs to ensure that more employees are able to share in owning the companies in which they work and thus able to share in the wealth they help create. Most of all, it is very welcome to read that one of our nation’s leading think tanks recognizes that broad-based ownership is a goal that all national leaders, no matter what political party she or he belongs, no matter whether so-called ‘left’ or ‘right’ should work toward.”

Discussions of Capitalism

You may have seen this op-ed column in The New York Times:

Capitalism for the Rest of Us


The authors of the column are well-known employee ownership researchers, Dr. Joseph Blasi and Dr. Douglas Kruse at the School of Management and Labor Relations at Rutgers University and Dr. Richard Freeman at Harvard University.

The column makes some great points about the value of employee ownership; we won’t repeat these points here. Go read the column.

What you may also have seen was criticism of the column and its ideas (well-researched ideas we should point out), by Fox News. Here’s where we get confused. Fox is saying this is all part of a liberal agenda when former President Ronald Reagan was a very strong supporter of ESOPs. We offer this video as proof.