For Immediate Release
March 9, 2015 Contact:
Steve Kelly (Toomey) 717-782-3951
Rachel Cohen (Warner) 202-228-6884
Toomey and Warner Team Up in Support of
Employee Ownership of Companies
Senators will introduce the bipartisan Encouraging Employee Ownership Act
WASHINGTON, D.C. — U.S. Senator Pat Toomey (R-Pa.) and U.S. Senator Mark Warner (D-Va.) are reaching across the aisle again to assist fast-growing private companies and their workers with taking a stake in their company’s future.
The bipartisan pair of senators has introduced the Encouraging Employee Ownership Act, which makes it easier for private companies to award stock as part of an employee’s compensation.
Since 1988, companies that wish to issue more than $5 million in stock to employees must comply with sensitive reporting and disclosure requirements. For new and fast-growing companies, stock compensation is a valuable tool, but many privately-held companies are reluctant to issue their workers more than the $5 million in stock that would trigger mandatory reporting of potentially sensitive information.
Under Sen. Toomey and Sen. Warner’s bill, this threshold would increase to $10 million before those requirements would kick in, and automatically indexes this amount to inflation every five years.
"As a former small business owner, I know that workers who really feel like part of the company can be the most efficient, effective, and loyal employees," said Sen. Toomey. "It is time that Congress makes it easier for workers to get an ownership stake. Let’s get rid of unnecessary government red tape which inhibits this goal. The Encouraging Employee Ownership Act is commonsense, bipartisan legislation and I look forward to working with Sen. Warner on this important effort."
"As someone who has been in business longer than I’ve been in politics, I know that America’s competitive edge relies on innovation and entrepreneurship. This bill will help support our newest and fastest-growing businesses that want to create jobs despite limited cash flows," said Sen. Warner. "Providing workers with the opportunity to own a stake in their company benefits both employers and employees."
Wegmans – a major employer in both states that has been lauded for the way it treats employees – endorsed Sen. Toomey and Sen. Warner’s efforts.
"We applaud the leadership shown by Sens. Toomey and Warner in introducing the Encouraging Employee Ownership Act and look forward to working with them and other members of the Senate to pass this legislation," said Paul Speranza, Vice Chairman of Wegmans, which has 16 locations in Pennsylvania and six locations in Virginia.
"Our employees are the reason for our success. We have always believed that if we meet the needs of our employees, they will take care of our customers. When that happens, the bottom line takes care of itself. It’s one reason Wegmans has been on FORTUNE magazine’s list of the 100 Best Companies to Work for since 1998.
"The Encouraging Employee Ownership Act is a straightforward and sensible inflation adjustment that updates an existing SEC regulation, Rule 701. This Rule allows privately-held companies to provide ownership opportunities to employees and is important because it helps companies like Wegmans to attract and keep the very best talent. It also allows companies like ours to protect confidential business information that, when revealed, could jeopardize our competitive advantage or cause damage."
U.S. Senator Pat Toomey (R-Pa.)
228 Walnut Street, Suite 1104
Harrisburg, Pa. 17101
Phone: (717) 782-3951
Cell: (717) 480-2806
Sign up here to receive Senator Toomey’s newsletter.