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Mini-cast 98: HR 6851 - Expanding EO

Picture of the US House of Representatives overlaid with a summary of HR 6851.

Bret Keisling discusses HR 6851 (linked), recently introduced by Rep. Alexandria Ocasio-Cortez (D-NY), which would require large public companies to award shares to employees as part of COVID-19 federal relief.


Mini-cast 98 Transcript

Bret Keisling: 00:06 Hello, my friends. Thank you for listening to the ESOP Mini-cast. My name is Bret Keisling and as it says on my business cards, I'm a passionate advocate for employee ownership. I'm going to spend a few minutes talking about House Bill 6851, which was introduced by New York Representative Alexandria Ocasio-Cortez, AOC, that ties federal COVID-19 relief for larger public companies to the expansion of employee ownership.

Bret Keisling: 00:36 There are certain things about the bill that I love and a couple of things that give me pause. To start, I'm going to share a brief summary of the bill prepared by the Congressional Research Service. You can find a link to the bill and the summary in our show notes.

Bret Keisling: 00:51 The summary states: "This bill requires a major corporation that receives federal aid related to COVID-19 (i.e., coronavirus disease 2019) to make an annual grant of equity to its employees until all such federal aid is repaid.

Bret Keisling: 01:09 A major corporation is a corporation that, among other things, has its securities traded on a national securities exchange, has to register its securities with the Securities and Exchange Commission, and has an aggregate market value of $75 million.

Bret Keisling: 01:26 The number of shares of stock such a corporation must grant to its employees shall be determined according to a specified formula. Such grant (1) shall be a grant of whole shares of stock; (2) may not be conditioned on the purchase of company stock or any employee performance evaluations; and (3) shall be equal, in terms of voting and dividend rights, to the class of securities otherwise issued by the corporation that carries the highest such rights." That, again, is the summary provided by the Congressional Research Service.

Bret Keisling: 02:08 Here's some positives. First of all, almost any bill that expands employee ownership is worth celebrating, including this one. Second, by targeting publicly traded companies over $75 million market value it won't be onerous on much smaller companies. I think it's fine, in this case, to add employee ownership expansion to the terms of COVID-19 relief, just as the government can dictate payment terms, length of the relief, whether it's forgiven or not, adding employee ownership is certainly very appropriate.

Bret Keisling: As far as the award of shares, absolutely love the fact that it's just based on if you are there you participate. That certainly fulfills the highest value of employee ownership, or one of the highest values, we're all in this together. Really, really liked the fact that the shares must be of the highest class of shares. All too often in minority shareholder situations, whether it's employee ownership or otherwise, there are special classes of shares that get most of the voting rights, most of the benefits and then there are other classes of stock that they don't share in this. So I love requiring this to be the highest class of shares.

Bret Keisling: My only hesitation with this bill is a general discomfort with the government forcing companies to give stock anywhere. But as I said earlier, tying it to COVID relief, which is voluntary -- it's very important, but it's voluntary -- I think is an appropriate use of the government's power in this case.

Bret Keisling: One other thing I want to do is talk about political personalities. Earlier this summer, we did a couple of mini-cast episodes on a Senate bill introduced by Senator Ron Johnson of Wisconsin. He's a Republican, he's very conservative, very supportive of President Trump. AOC is obviously famously progressive, probably as progressive a political leader on the left as there is in the United States. Folks, here's an example where I could point out lots of issues with both Senator Johnson and AOC that I disagree with them on. So for me, as someone who is a passionate advocate for employee ownership, I'm going to be grateful for any support of employee ownership, no matter where it comes from on the political spectrum. And I hope you will too.

Bret Keisling: As I've said in previous podcasts, regardless of where you are politically, let's say you don't agree with Senator Johnson on just about any political issue. He's a very conservative Republican. Well, at least you agree with him on employee ownership. Same with AOC. You may disagree with her. She may not be your cup of tea, but you agree with her on employee ownership.

Bret Keisling: With that folks, this episode is coming out Labor Day 2020. It has been a crazy troubling year for all of us. I hope this Labor Day you'll take the time to celebrate what has made the United States great -- and that's the employees, that's the people who really have built this company. And if you're involved in employee ownership, either as an employee owner or a practitioner or an advocate, thank you so much for everything that you do. And we are all part of something that, if we can harness it, will really lead to great positive change in this country, regardless of your political orientation otherwise.

Bret Keisling: Happy Labor Day weekend. Thank you so much for joining us. We'll see you this Tuesday on the primary EO/ESOP podcast, as we proudly kick off Season Four of our project. Thanks for listening. Have a great day.

Bitsy McCann: We'd love to hear from you! To contact us, find us on Facebook at KEISOP, LLC and on Twitter @ESOPPodcast. To reach Bret, with one "T", email, on LinkedIn at Bret Keisling, and most actively on Twitter at @EO_Bret. Again, that's one "T". This podcast has been produced by The KEISOP Group, technical assistance provided by Third Circle, Inc. and BitsyPlus Design. Original music composed by Max Keisling, archival podcast material edited and produced by Brian Keisling, and I'm Bitsy McCann.

Standard Disclaimer: The views expressed herein are my own and don't represent those of my own firms or the organizations to which I belong. Nothing in the podcast should be construed as guidance or advice of any kind in any field and the fact that I mentioned an organizational website or an advocate or a company on a podcast does not reflect an endorsement, but if you've heard your name or your group's name mentioned on this podcast, I'd love to have you come on and talk about it yourself.

A note on the transcript: This transcript was produced by Temi, an automated transcription service. While it has been reviewed by The ESOP Podcast, we can not guarantee the accuracy of the transcription. Please refer to the original audio when citing sources.


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