Employee Ownership Month Begins October 1st

Employee Ownership Community Begins Month-long Celebration

The ESOP Association and its members will celebrate Employee Ownership Month throughout the month of October, which is a tribute to the tremendous spirit of employee ownership.

Employee Ownership Month is an opportunity for ESOP companies across the nation to educate employee owners, the public, and government officials about the undeniable benefits of employee ownership for employees, their companies, the communities they are a part of, and the nation. For more information about Employee Ownership Month, click here.

“For over 20 years, our members have been working to promote employee ownership and its benefits every day,” said ESOP Association President, J. Michael Keeling. “I’m pleased to announce the start of Employee Ownership Month and am looking forward to a month of celebrations.”

To view additional comments by Mr. Keeling on Employee Ownership Month, see below.

Employee ownership facts:

  • There are approximately 10,000 ESOPs in place in the U.S., covering 10.3 million employees (approximately 10% of the private sector workforce).
  • The 22nd Annual Economic Performance Survey conducted in 2013 by the Employee Ownership Foundation found:
  • 94% of survey respondents reported that creating employee ownership through an ESOP was ‘a good business decision that has helped the company.’
  • 64% of companies indicated they have created an ESOP education program or ESOP advisory committee since establishing the ESOP.
  • 77% of respondents indicated the ESOP positively affected the overall productivity of the employees.

C.S. Davidson, Inc. Honored with Well Workplace Award through the Lancaster County Business Group on Health

ESOP Association Member News

Well Workplace Winners CS Davidson[5]
Casey Deller, P.E., Project Manager and Chairperson of the C.S. Davidson, Inc. Wellness Committee accepts the Gold Award on behalf of the Lancaster County Business Group on Health.
ESOP Association member, C.S. Davidson, Inc., located in York, PA, recently received a Gold Award for Well Workplace through the Lancaster County Business Group on Health; an award created in 2010 to recognize successful workplace wellness initiatives, while honoring the leadership and dedication of local organizations who have worked to improve the health and well-being of their employees.

“This award is further confirmation that our efforts to enhance the health and well-being of our employee owners are paying off,” said Casey Deller, P.E., Project Manager and Chairperson of the C.S. Davidson, Inc. Wellness Committee. “Through the development of a culture promoting healthy lifestyle choices and empowering our staff to take the initiative to improve their own health, we have in turn improved C.S. Davidson.”

The gold award for Wellness in the Workplace reflects organizations that are developing comprehensive programs that are producing results. These programs are a strategic and integral part of the business. For more information on C.S. Davidson, visit their website.

Congratulations to the employee owners of C.S. Davidson on the honor.

Iowa Governor Talks ESOPs

Last week, Iowa Governor, Terry Branstad, gave his annual State of the State speech. We won’t get into the specifics of the speech but if you’re interested, you can read the full speech here. It’s also posted here on the Iowa state website.

What we were surprised and happy to hear was this:

“We must work to keep Iowa companies in Iowa, even when an ownership change takes place.

This is not just a tool for Iowa businesses; it is a tool for Iowa communities–Iowa communities where these companies represent so much more than jobs; where these companies represent our families, friends and way of life.

Many of these companies have operated in Iowa for years, operated by owners committed to the local way of life.  And when these owners wish to retire, they must have options for keeping their company local.

I am proposing legislation that will encourage the formation of Employee Stock Option Plans to encourage the sale of these local businesses to the very employees who have made that company a profitable success.

Our plan will encourage more Iowans to own a stake in their company, to reap a greater share of the fruits of their own labor, and to help protect the quality of life in their local community.

Employee ownership is great for the Iowa communities in which these businesses, jobs, and careers exist.”

Yes, Iowa Governor Terry Branstad is encouraging ESOP creation in the state.

Obviously, we here at The ESOP Association are pleased to see a proposal to encourage the creation of new ESOPs in Iowa, and to assist our existing companies, take root in Iowa. With 28 corporate members in the state, one of which we honored last year as the ESOP Company of the Year, Van Meter, Inc., we know what an ESOP brings to a company, to the company’s employees, and to the community where the company is located. We can only surmise that Governor Branstad understands that ESOP companies are more productive, more profitable, and more sustainable, providing locally-controlled jobs.

Balance: Good News for ESOP Advocates

The following article originally ran in the August 2011 issue of the ESOP Report, the newsletter of The ESOP Association, as the Washington Report column.  The ESOP Report newsletter can be found in the members only section of The ESOP Association’s website.

The general view of the U.S. Congress right now is supposedly dog eat dog between the two political parties — the TV cable news says it, the social media says it, the President says it, members of Congress say it, academics say it, and so on.

Well certainly on big picture issues, such as how to control the national debt, how to lower medical care costs, etc., what everyone is saying about Congress is more or less correct.

Some ESOP advocates have heard the big picture news, and express concern that The ESOP Association and the community it represents has gone over to the “Republican” side too much.  These advocates of course have values that trigger voting for Democratic candidates.

Whether one’s world view is more in line with the Democrats or the Republicans, on smaller public issues, and sadly ESOP policy is not a major public issue in the U.S., the general view of U.S. policy making is wrong — having supporters in both parties is the key to preserving a preferred small interest policy.

[For example, a positive signal from the hearing on the DOL appraiser regulation mentioned on page one, was criticism about the proposal was made by both Republican and Democratic members of the Subcommittee.  If the critics were only Republicans, any impact on DOL officials would have been muted.]

So, is it the case that ESOP advocates are tilting in a major way to the Republicans in Congress, so that when the fight over tax reform erupts, and it will sooner or later, a risk if the pendulum swings back in favor of the Democrats before serious tax reform legislation is considered by Congress?

Well, here is the positive news.  ESOP support is balanced in Congress — with an almost equal division between Republicans and Democrats, and even with equal division within the various factions of the two parties — with a good split between the newer Republicans who came to office with the strong backing of the Tea Party, and senior Republicans, and with a good split between the “moderate” Democrats and the “liberal” Democrats.

And there is data to back up this assertion.

Right now, there are 126 members of Congress who have publicly done something, such as co-sponsoring a bill, or writing a letter, in support of a pro-ESOP position.  Ninety-eight are members of the House, and 28 are members of the Senate.

Fifty-four of the House ESOP advocates are Republicans, and 44 are Democrats.  Since there are more Republicans in the House than Democrats, the ten person spread is not that off the mark of the overall percentage of House members divided between the two parties.

Among the 28 Senate ESOP advocates, 13 are Democrats, and 14 are Republicans, and one is an Independent, who caucuses with the Democrats, and has Committee assignments under the Democratic banner.  So the split is really 50-50, and the Senate is nearly evenly split between the two parties.

But set aside the party affiliations.  How did the 126 ESOP advocates vote on the debt ceiling increase that received so much attention in late July and early August?

Again, the 126 ESOP advocates split their votes almost the same as the rest of the Congress.  Most voted yes, as did the entire Congress.  Those voting no were primarily affiliated with their Tea Party backers if Republicans and if Democrats with their more liberal backers, such as those in the MoveOn organization.

Bottom line is that the development of ESOP friends in Congress has not been about which political party should reign; it has been about ESOP companies and advocates promoting the positive impact of employee ownership through ESOPs on employees, on the company, and on the local community.

ESOP advocates have done well, and when the tough fight over tax reform breaks out and it is debated whether to have tax preferences for ESOP creation and operation, this balance will be beneficial.   ESOP advocates should continue to work for ESOPs in their communities, and not put their ESOP beliefs under a basket if their elected official is not of “their” party.

Inside Indiana Business Highlights ESOPs

ESOP Association member, Jackie J. Salmon of McCready and Keene, Inc., located in Indianapolis, IN, was recently interviewed about ESOPs on Inside Indiana Business with Gerry Dick.

You can watch the interview here.

Go take a look. And thanks to Jackie for helping to spread the ESOP message.

New from The ESOP Association

The following press release was sent out by The ESOP Association.

For Immediate Release: September 15, 2011

For More Information: Amy Gwiazdowski, 202/293-2971, amy@esopassociation.org

 The ESOP Association Submits Statement to Finance Committee on Tax Reform and Retirement Security

September 15, 2011 (Washington, DC) – On September 15, 2011, The ESOP Association submitted a statement for the record to the Senate Committee on Finance which held a hearing examining tax reform options and the promotion of retirement security.

“We presented to the Committee data that shows ESOP companies and their locally-controlled jobs are more profitable, more productive, and more sustainable,” said ESOP Association President, J. Michael Keeling. “The best jobs program Congress could consider now would be encouraging more employee-owned companies.”

A copy of the statement can be found on the Association’s website here.  A link to the statement is at the top of the page.

The ESOP Association is the national trade association for companies with employee stock ownership plans (ESOPs) and the leading voice in America for employee ownership.  The core cause of The ESOP Association is the belief that employee ownership will improve American competitiveness, increase productivity through greater employee participation, and strengthen our free enterprise economy.


Indiana Freshman Congressman Speaks Out for ESOPs, Strongly

Congressman Rokita (R-IN) Drills Deep on Labor Department’s Lack of Data Supporting Proposed Appraiser/Fiduciary Rule

On July 26, 2011, the House Committee on Education and the Workforce’s Subcommittee on Health, Employment, Labor, and Pensions (HELP) held an oversight hearing on the Department of Labor’s (DOL) proposed regulation to mandate that all appraisers of private ESOP company stock be ERISA fiduciaries.

Both Republican and Democratic members asked sharp questions, ranging from concerns about the impact on IRAs and 401(k) plans to ESOPs in private companies.

But without question, the inquiries about the proposal that hit home for the ESOP community were from freshman Indiana Congressman Todd Rokita (4th District).  His questions stemmed from his disappointment to a letter he received from Secretary of Labor Hilda Solis.  In May 2011, he asked for the Department to be more specific as to the extent of “bad” appraisals of ESOP companies.  He pointed out that up to the time of his writing, all the Department had said in justifying its position was, “Many ESOP appraisals were wrong.”  In short, he was asking how “many” is “many.”

Later in May, Secretary Solis answered his inquiry citing six law suits involving “bad” valuations as evidence that the proposed regulation was justified.  One case dated from the early 90s involving a Mafia family and real estate.  Two other cases were from the mid-90s.  Only one was a recent case.

On July 26, Congressman Rokita was persistent in asking the Assistant Secretary of Labor, Phyllis Borzi, whose sub-department of the DOL, the Employee Security Benefits Administration (EBSA), issued the proposed regulation, to quantify the problem.  He pointed out that six cases over nearly 20 years was not evidence of “many.”  Additionally, he pointed out that probably since 1990 most likely 100,000 ESOP appraisals had been done, and the best EBSA could do was cite six?

ESOP advocates have in testimony, in letters, and verbally, expressed many problems with the DOL proposal; and several members of the HELP Committee, such as Representatives Roby (R-AL), Loebsack (D-IA), and Tierney (D-MA) raised questions critical of the DOL proposal.

But perhaps most frustrating is the charge that the ESOP world is full of flimflammers, shysters, and enablers of bad valuations that do not benefit employee owners.  Congressman Rokita put his finger on the shallowness of this claim by the Department.