Toomey and Warner Bill Supporting Employee Ownership of Companies Moves Forward
Press Release
Today, the Senate Banking Committee overwhelmingly approved the bipartisan Encouraging Employee Ownership Act offered by U.S. Senators Pat Toomey (R-Pa.) and Mark Warner (D-Va.) in order to make it easier for private companies to award stock as part of an employee's compensation.
Established nearly two decades ago, current Securities and Exchange Commission rules force companies that wish to issue more than $5 million in stock to employees to comply with onerous reporting and disclosure requirements. For new and fast-growing companies, stock compensation is a valuable tool, but many privately-held companies are reluctant to cross this threshold due to the mandatory reporting requirement.
Under Sen. Toomey and Sen. Warner's bill, this threshold would increase to $10 million and would automatically index to account for inflation every five years.
"As a former small business owner, I understand that individuals who are personally invested in their work tend to be both the most productive and loyal employees," said Sen. Toomey. "For far too long, this antiquated rule has stood in the way of allowing workers to have a greater stake and say in their work and it needs to change. Sen. Warner has been a great partner in this effort and I am pleased that the Senate Banking Committee moved this legislation forward today. I am hopeful that this bipartisan bill will be considered by the full Senate soon."
"One way to get this economy working better for more people is to give employees a greater ownership stake in the companies where they work," said Sen. Warner. "When employee ownership is spread across a growing business, it has a huge impact on workplace culture, employee productivity and wealth creation. The Encouraging Employee Ownership Act will encourage fast-growing companies and start-ups to give more employees an ownership stake by reducing the paperwork burden on privately-held businesses. This will allow greater distribution of equity beyond just the C-suite."
The Encouraging Employee Ownership Act is supported by:
* Wegmans
* BIO
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