Corey Rosen
Department of Labor Sends Proposed ESOP Valuation Rules to OMB
We will post an update when the OMB completes its review of the proposed regulations, which should happen before the end of 2024.
Employee Ownership Blog
Corey Rosen
Corey Rosen
New NCEO Paper on Private Equity and Employee Ownership
In the last several years, there has been a growing trend for private equity firms to include broad-based employee ownership programs in their transactions. This trend has gained national attention, with stories on 60 Minutes, Freakonomics, the New York Times, and many other news outlets. The new paper Private Equity and Employee Ownership (PDF; also see the embedded version below) by NCEO founder Corey Rosen looks at the history of private equity and employee ownership in the 1980s and the current wave of interest among some large private equity firms in sharing ownership with employees.
Corey Rosen
NC, IN, GA, WI, MO Designate October as Employee Ownership Month
Governor Roy Cooper of North Carolina has declared October as employee ownership month. Among other things, Cooper said that “employee ownership drives the creation of wealth and helps to close the wealth gap for North Carolinians, as employee owners are shown to have more than twice the retirement savings as their peers and greater financial assets overall.”
Corey Rosen
Harris/Walz Campaign Promises to Promote Employee Ownership
In a recent policy statement, the Harris/Walz campaign became the first presidential campaign to explicitly endorse employee ownership: "In addition, Vice President Harris and Governor Walz will reform our tax laws to make it easier for businesses to let workers share in their company’s success, including through broad-based employee stock ownership, profit-sharing plans, and comparable arrangements, with appropriate guardrails to ensure these plans benefit and protect workers."
Corey Rosen
Six Percent of UK Business Transfers Are Now to Employee Ownership Trusts
In 2014, the United Kingdom passed a law providing a tax exemption for business owners selling to an employee ownership trust (EOT). An EOT is somewhat similar to a U.S. ESOP, but unlike an ESOP, with an EOT the employees do not have individual share accounts and do not have any claim on equity when they leave the company. Instead, the trust is meant to own the company in perpetuity on behalf of the employees, with the employees getting a dividend or profit share each year. New data confirm just how successful this tax incentive has been in encouraging transfers to EOTs in the UK. According to the European Federation of Employed Shareholders, 1,756 UK companies have been transferred to their 124,000 employees via EOTs as of July 2024. About 6% of UK business transfers so far in 2024 have been through EOTs, as the graph below shows.
Corey Rosen
Key Trends in ESOP Litigation in the Last 12 Months
Each year the NCEO compiles a review of ESOP litigation over the prior 12 months. The review has been incorporated into our book ESOP and 401(k) Plan Employer Stock Litigation Review 1990-2024.
Corey Rosen
House DOL Budget Omits WORK Act Funding, Senate Backs ESOP Support
The 2026 proposed appropriation for the Department of Labor (DOL) passed by the House Appropriations Committee lacks funding for state employee ownership offices authorized by the WORK Act that the Senate Appropriations Committee recommended in July. That committee is recommending an initial $2 million for 2025 to help fund state employee ownership outreach programs. The Senate committee also urged the DOL to finalize its ESOP valuation regulations.
Corey Rosen
Comment Period Opens on DOD ESOP Contracting Rule
The comment period for a proposed Department of Defense (DOD) rule allowing 100% ESOP-owned companies to receive sole source follow-on contracts ends on July 29.
Corey Rosen
NC Law Allows Minority ESOPs to Qualify for HUB Program
The North Carolina legislature has passed and the governor has signed S. 802 (PDF), an infrastructure finance bill that also includes an unrelated provision allowing ESOPs in which at least 51% of the participants are “minority persons or socially and economically disadvantaged individuals” to qualify for the state’s historically underutilized business set-aside program. The law states that “an ESOP company applying for certification as a historically underutilized business shall provide an attestation that it meets the requirements of this subdivision together with such documentation supporting the attestation as may be required by the Secretary." The law became effective on July 1, 2024.