The Employee Ownership Update
January 3, 2018
Tax Reform and Employee OwnershipThe NCEO has updated its special bulletin on tax reform to incorporate the impact of provisions that focus specifically on certain broad-based equity compensation programs in private companies. Some employees will receive more flexible tax treatment of their equity awards.
The NCEO will continue to publish about the the evolving understanding of the impact of tax reform on employee ownership. The original bulletin (from December 21) focused on the indirect impacts of tax reform on ESOPs by looking at the changing treatment of business interest expenses, pass-through income, and state and local taxes.
We welcome your questions and ideas about the impact of tax reform.
Employee Ownership in the Harvard Business ReviewThe January-February 2018 issue of the Harvard Business Review includes the article More Than a Paycheck (HBR allows the general public to view three articles per month), by Dennis Campbell, John Case, and Bill Fotsch. The article makes the case for employee ownership, concluding:
American business finds itself in an unusual position today. The decline in the good blue-collar jobs of an earlier era has contributed to stagnating wages among the bottom 80% of U.S. households, feeding growing levels of discontent. Governments have for the most part been unable or unwilling to address this situation. Many voters don't even believe that they should. But here is an arena where business can take the lead. Almost any company can set up some kind of system that encourages employee ownership, profit sharing, or both. Most can create a culture that helps employees learn the business and improve its results and that puts more money in their pockets right away. Executives who adopt such a system will find that they are pioneers in addressing one of America's most pressing problems—and, most likely, that their company performs better than it did before.
ESOP Company CEO Runs for Governor of MaineShawn Moody, who founded the 200-employee Moody's Collision Centers, now an employee ownership company, is running for governor of Maine. Moody's campaign website describes the relationship between employee ownership and his position on economic development:
Moody's employees are collectively coworker owners. Moody's employee ownership is a reflection of Shawn Moody's approach to problem solving, which is based on empowering people and challenging them to achieve success, which benefits everyone from the top-to-bottom of an organization.