The Employee Ownership Update
April 1, 2014
Connecticut State Senate Introduces Bill to Promote Employee OwnershipConnecticut State Senator Donald Williams—the president pro tempore of the Connecticut senate—and Senator Martin Looney, both Democrats, introduced Committee Bill No. 3, "An Act Establishing an Employee Ownership Program to Promote Business Retention and Growth." The bill allocates up to $500,000 for a "community development corporation, regional economic development corporation or other nonprofit organization to establish and administer a program to encourage employee stock ownership plans and other forms of employee ownership in existing and start-up businesses."
The impetus for the bill is a meeting the NCEO arranged with Senator Williams to discuss how employee ownership legislation could benefit the state's economy. Attendees included Joe Quinn, the general counsel for the Connecticut Senate Democrats; Richard Orr, general counsel for the University of Connecticut and former BL Companies executive; Cecil Ursprung, former CEO of Reflexite Corporation; and employee-owners from Web Industries and BL Companies.
Regulations on Financing of Buyouts to have "No Exceptions"The Office of the Comptroller of the Currency announced an update of a policy launched one year ago intended to reduce high-risk loans for corporate acquisitions. Quoted in the Wall Street Journal, Martin Pfinsgraff, the OCC's senior deputy comptroller for large-bank supervision, said, "On new issuance, we have a 'no exceptions' policy." The guidance, originally published in March 2013, said that banks should not finance deals that would result in the post-transaction company having a debt-to-EBITDA ratio greater than 6:1. This policy could affect ESOP transactions, although the appropriate way to consider seller financing and other ESOP issues is not clear.
New Book by Dean Schroeder: The Idea-Driven OrganizationThe latest book by keynote speaker at the NCEO's annual conference, Dean Schroeder, was released yesterday by ESOP-owned Berrett-Koehler Publishers. The Idea-Driven Organization: Unlocking the Power in Bottom-up Ideas, co-authored with Alan Robinson, draws on what the authors have learned about creating organizations "that are structured and managed to be driven by the ideas of the people what are actually doing the work and dealing with the customers."
The book will be available at the NCEO conference, and those interested can join a breakout session with Dr. Schroeder in a breakout session at the conference (see concurrent session 5 in the conference program). You may also sign up for a free Webinar with the authors held on April 2.
GEO Conference Will Be May 7 to 9The Global Equity Organization (GEO) will host its 15th annual conference in Miami on May 7 to 9. Topics include designing equity compensation programs, effective plan communications, connecting plans to performance outcomes, case studies, and global tax issues from mobility to country-specific rules.
PBS Program on Worker Ownership to Air on April 6On April 6 at 5PM (Pacific), Seattle's television station KCTS-9 will begin a national run of the film Shift Change, which documents the development of worker cooperatives in the United States, as well as their connections with the inspiring network of worker cooperatives in Mondragon, Spain. The schedule for other PBS affiliates will be available at the film's Web site www.shiftchange.org.
ESOP-Owned Full Sail Brewing Named Craft Brewer of the YearEmployee-owned brewery Full Sail Brewing was awarded the title of Craft Brewer of the Year by Beverage World Magazine. Full Sail CEO Irene Firmat, a keynote speaker at the 2013 Employee Ownership Conference, said the award "means that not only do we take brewing seriously, but also our responsibility to our employee-owners, our community, and the beauty of our environment."
Author biography and other columns in this series