On June 19, 2015, Wisconsin Congressman Glenn Grothman (R-6) spent over an hour and a half touring the Priority Sign headquarters in Sheboygan, WI and talking with the company’s employee-owners. Rep. Grothman engaged in an informative Q&A session and the company’s owners were great advocates for the use of ESOPs, explaining what the opportunity has meant to them. Before leaving, Rep. Grothman stated that he would sign on as a cosponsor to H.R. 2096 (the Promotion and Expansion of Private Employee Ownership Act of 2015), which he did on the same day.
Priority Sign is a 100% ESOP-owned company that specializes in national sign programs and rebranding campaigns. It is headquartered in Sheboygan, WI, and has seven offices throughout the U.S. They have created thousands of signs for a number of industries nationwide and globally. Their clients include such well-known brands as AIG, T-Mobile, AT&T, Panda Express, BMO, Wells Fargo, Hertz, and Microsoft.
H.R. 2096 cites a number of studies that show how ESOPs outperform non-ESOP companies, particularly highlighting the exceptional contribution to employee retirement assets. Also noted is the fact that currently, companies that qualify for SBA status lose that qualification once they become 50% ESOP-owned. The bill aims to create incentives for S-corporations to form ESOPs and stop the automatic loss of SBA status for small businesses. Specifically, S-corp ESOPs will be given the same tax deferral for sales of employer stock to the plan as C-corps get, they will get deductions for interest on loans that finance purchase of stock by the ESOP, the Department of Treasury will form an office that will specifically serve S-corp ESOP companies, and SBA eligibility will be determined by considering each ESOP participant as “directly owning his or her proportionate share of the stock in the ESOP business concern owned by the ESOP.”