Employee Ownership Blog

Timothy Garbinsky

Calibre Wins 2021 Achievement Award at Fall Forum

As anybody who just finished attending our 2021 Fall ESOP Forum can attest, it’s a busy time of year for us all. In my case, I found myself conducting interviews, moderating discussions, and joining some of the more casual networking sessions, all to make sure members and attendees truly got the most out of our event. And this doesn’t even include the sessions I tried to attend for my own edification, since I, like all of us, still have a lot to learn.

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Corey Rosen

Defense Authorization Act Provision Makes 100% ESOPs Eligible for Small Business Set-Asides

A potentially major improvement in rules for ESOP defense contractors was included in the Senate Armed Services Committee’s markup of the 2022 National Defense Authorization Act (NDAA, S 2042). An amendment from Sen. Jean Shaheen (D-NH) would provide that the Department of Defense should create a pilot program that would allow companies that are or become 100% ESOP-owned to receive noncompete follow-on contracts for the work, even if they no longer meet applicable small business or other set-aside requirements. The award would be contingent on a finding that the contractor’s performance was satisfactory or better. The program would run for three years, and the Government Accountability Office would be required to provide an assessment of it with two years of the program’s sunset.

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Corey Rosen

Court Rules Decisively Against DOL in ESOP Valuation Case

In Walsh v. Bowers, No. 1:18-cv-00155-SOM-WRP (D.C. Hawaii, September 17, 2021), a district court decisively ruled in favor of the trustee and the board of directors of the ESOP company Bowers+Kubota in an ESOP valuation case. The judge ruled that the DOL’s valuation "rests on errors" because its expert failed to follow standard valuation practices, used inaccurate and incomplete information about the company’s finances, and improperly compared the price the ESOP paid to a very preliminary lower offer from another company. The court noted that the preliminary offer was likely just a negotiating tool, analogizing that  “an individual who makes an offer of $15,000 for a used luxury car with a Blue Book value of $40,000 does not, by virtue of making a ‘lowball’ offer that is never accepted, tend to establish that the car is worth only $15,000.”

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Loren Rodgers

Four Paths to Employee Ownership

The NCEO recently published a table that highlights the main characteristics of four types of employee ownership, found in our web article Employee Ownership for Closely Held Companies: ESOPs, Equity Grants, Trusts, and Worker Cooperatives. The article explores tax treatment, typical uses, financial payout to employees, governance, typical costs, and more. It is a living document, and we welcome your feedback!

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Loren Rodgers

NCEO Article Encourages States to Create Employee Ownership Programs

An August 9 article by NCEO founder Corey Rosen on the website Governing, Employee-Owned Companies Could Use a Government Nudge, argues for state and local programs to provide outreach and technical assistance to help educate business owners about employee ownership. Rosen cites extensive research to make the case that promoting employee ownership is one of the most cost-effective economic development policies these entities can pursue. The article provides an overview of efforts in several states and local governments, with a major focus on Colorado (see our July 26 community conversation, How Colorado is Taking the Lead on Employee Ownership). Governing is a prominent website (formerly a print magazine) for state and local legislators and executives.

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Loren Rodgers

Get the Most Out of the Fall ESOP Forum

You can get a big picture overview of all things related to making an ESOP company work well at the Fall ESOP Forum, but most people I talk with have one aspect of ESOPs at the top of mind. We structured the Fall Forum with four tracks so you can be confident that you can focus on building your knowledge and getting ideas you can implement. Get our Fall Forum curriculum guide (PDF) to help choose the best sessions to attend based on your areas of interest or job focus. See the Fall Forum program for a searchable list of sessions and speakers; you also can filter by track. If you haven't registered yet, be sure to register now.

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Timothy Garbinsky

What Does It Mean to Achieve in 2021?

Every year around this time, I get excited about our Fall ESOP Forum, taking place this year from September 22 to 24 online. It serves as both a welcome reprieve from the late summer/early autumn doldrums and an augmentation of Employee Ownership Month, which falls directly on its heels. It also provides a yearly opportunity to take stock of the past year while looking forward to what the upcoming year might have in store for us.

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Dallan Guzinski

The Ownership Culture Survey Networking Program is Launching in 2021

Research shows that the existence of an ESOP is not in itself sufficient for a company to attain the competitive and performance advantages associated with employee ownership. A company must also build an ownership culture—a workplace where employees think and act like owners. The NCEO's Ownership Culture Surveys are designed exclusively for employee ownership companies. The surveys measure how well employees understand their ESOP and ways the company can more effectively capture the benefits and competitive advantages of employee ownership.

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