House Passes Hultgren-Delaney Legislation to Encourage Employee Ownership
WASHINGTON – Today, the House of Representatives passed bipartisan legislation to boost employee ownership in private companies. The Encouraging Employee Ownership Act (H.R. 1343) was introduced by Congressman Randy Hultgren (IL-14), with Congressman John K. Delaney (MD-6) serving as the lead Democratic cosponsor of the bill. Congressman Delaney is the only former CEO of a publicly-traded company in the House of Representatives and was recently named one of the 50 “World’s Greatest Leaders” by Fortune.
The bill passed by a bipartisan 331-87 vote and now heads to the Senate. To view Congressman Delaney’s remarks during floor debate on the bill, click here.
“Employee ownership is good for the company and good for employees and we should be doing more to encourage it,” said Congressman Delaney. “One of the biggest issues facing our economy is that low-income and middle class people haven’t benefited enough from economic gains and increases in productivity and profitability. More employee ownership addresses this problem head on by giving workers a literal stake in the companies they are building and that’s why this bill is so important. This bill eliminates de facto barriers to companies issuing additional stock to their employees and introduces a sensible inflation adjustment so that we can update a rule that both parties have long supported. I am proud to work with Congressman Hultgren on this bill and look forward it passing the Senate and becoming law.”
The legislation updates the Securities and Exchange Commission’s (SEC) Rule 701 to allow private companies to offer more company stock options to their employees. Under Rule 701 currently, if a private company offers more than $5 million dollars in stock options in a given year as part of a compensation arrangement, they are subject to additional reporting requirements which could place them at a competitive disadvantage. H.R. 1343 raises that threshold to $10 million dollars, which would represent the first update in decades.