Chris Van Hollen Talks Employee Ownership at the 2024 Employee Ownership Ideas Forum

it is my great pleasure now to uh welcome Senator Chris Van Holland uh to our stage um uh he's from my home state Maryland and um and I can tell you um I have followed his career uh Senator van Holland has a distinguished career in public service serving in the Maryland state legislature from 1991 to 2003 then moving to the House of Representatives and now in the Senate s since 2017 and as a marylander from Montgomery County I have followed him for a very long time and have always been impressed by his um practical ability and dedication to really doing things that make the people's lives better that he serves um he's incredible has an incredible ethos of service um we have really appreciated his support for uh creating an economy that works for everyone he's a tireless advocate for better jobs for small business resilience and for employee ownership um we ask him to show up for our employee ownership events and he always does he showed up when we were kicking off our series on employee ownership he uh came last year and we were so grateful for that and we are so grateful to welcome you back this year thank you so much for all you do Senator [Applause] B well thank thank you so much and and um it goes to show you should always have U one of your favorite constituents introduce you so thank thank you so much for your leadership and it's uh wonderful to be back uh with all of you and it's great to see a room full of people uh who are very focused on trying to take some practical steps uh to make sure that we can uh build an economy that works for every American um I want to thank many of the organizations that we've worked with over the years as we try to get this leg legislation uh over the Finish Line um Jack Mor already I don't know if Jack is here with ownership uh America and to the entire team there to Rutter's Institute for the study of employee ownership and profit sharing thank you and the Aspen Institute for economic opportunities program um also saw Jim Jim bonam uh with the ESOP um Association but to all of you uh who've been part of this effort thank you and I I do I don't know who else you've heard from from the Senate of the house but I do want to thank my my colleagues in the house have been working with us on this legislation and also want to take this opportunity just to thank my my partner friend and colleague from from Maryland Senator Carden uh who of course was chair of the small business uh committee uh for a very long time um and really worked to try to create more incentives uh for employee ownership um and we want to pick up that baton and build uh upon uh it and Senator Shaheen of course who's the current uh chair of the small business uh committee uh has also been very committed uh to these issues and I've been in regular communication with her about um the legislation that we've been working on look I'm I'm preaching to the choir in terms of the benefits of employee ownership so I'm not going to spend a lot of time uh reminding everybody of the benefits but I do think that we collectively um need to do more to communicate the benefits uh to uh small business owners other business owners who may not be in this room as well as to their employees because I do think lack of education and awareness um has been an impediment along with some of the other impediments that I'm going to mention that we're hoping to uh address directly uh through legislation but I mean it it it's it's clear that when everybody has a stake uh all the employees and workers have a a stake in the outcome of an Enterprise uh that they will be more dedicated uh to the effort and will benefit uh more from uh the overall effort and that does mean that when a business hits the skids potentially and has some tough times everybody sort of comes together recognizes everybody needs to make sacrifices uh but when a business or Enterprise is doing well um Everybody benefits uh collectively and and and workers obviously not just in the form of a a paycheck but in terms of growing their wealth as the wealth of the Enterprise grows and and that of course is the fundamental idea here of trying to expand uh employee uh ownership uh to try to make sure that uh workers get the fruits of their labor not just in terms of that Weekly paycheck uh but the value that's built up uh over a period of of time so despite all these benefits um the reason we're here is because we want to expand uh the circle I mean for example in in Maryland only a very small portion of Maryland companies are employee owned uh the most recent data that I've looked at from this year shows Maryland is home to 99 esops and just over 27,000 uh plan participants uh you know this is out of a state of almost 8 million people lots of lots of small businesses middle-sized businesses and other businesses so clearly we have a lot of work to do uh to address uh these issues and make sure that we can accomplish uh our our goals and if you look um collectively at small businesses in the country um we are facing uh as all of you know and you probably talked about it uh the silver tsunami uh where so many of these business owners are near retirement age and so the question is whether they're going to have an opportunity and mechanisms to pass those businesses onto their employees um or whether some outside entity um will swoop in uh and purchase um that particular business I mean it could be a private uh Equity Fund it could be a company that's overseas that's hunting for you know successful small businesses in the United States um and I I think we understand that we're all better off um if those employees can take over the ownership of the company and not just not just for themselves and not just for sustaining those businesses but for the communities uh that they live in because they are attached to communities they're part of you know the local athletic leagues they're part of um you know the ptas they have a stake in a community um whereas some you know fund from outside does not have that same attachment uh to making sure that uh the community will will benefit as those small businesses um uh are transition uh from one owner uh to another and so that that was the entire idea and purpose uh behind the employee Equity investment act uh it's a bipartisan uh Bill U my co-sponsor chief co-sponsor Senator Rubio um and in the house it's also uh bipartisan um and it's not just the two of us there other Republicans and Democrats uh who have co-sponsored uh this legislation and and the goal is to overcome some of those hurdles um that I I mentioned um by providing loan guarant guarantees to investment funds that are devoted to expanding employee ownership and those investment funds would finance and facilitate the process of selling a company to its employees and also sustain and expand existing employee owned firms at no additional cost to the taxpayer the way it's it's structured uh so if a business goes up for sale these funds could pitch the employee ownership employee ownership as an option uh for businesses that may not have heard of the concept so it gives these entities a stake in trying to address that education uh issue um as you all know Employee Stock ownership plans and worker owned cooperatives can be complicated uh and these funds would also bring with them some of the expertise uh that can help navigate uh these transactions and I I I want to thank the Department of Labor uh we've worked with them to try to better streamline some of those processes even now uh but we all know we got a lot of work to do and of course they would bring Capital um which is a huge barrier probably the biggest upfront barrier uh to employee ownership currently um it is the selling owner who self- finances existing employee ownership transactions meaning that the owner has to wait 5 10 years maybe longer to receive full payment and so if you've got an option you know as a retiring owner um to take you know a lump sum all at once obviously that's easier even if you're an owner that wants to pass on uh the business uh to your employees so we want to make this easier and I also want to make sure and everyone here understands that we would adopt a set of very strict rules uh that we collaboratively have developed with you and others stakeholders um and and and employee organizations uh to make sure that workers come first we do want to make sure that there are very clear standards uh in place so that when we have one of these transactions um the best interests of the workers uh do come first so this is an exciting um bipartisan initiative um we are exploring different routes to legislative success um as we speak um the route we've got it structured in the bill right now uh goes through the small business administration there may be other federal agencies uh where this might ultimately find its home uh we're exploring those ideas really as as we speak but the goal Remains the Same regardless of what federal agency uh it would travel through um and the goal is to make sure that you know more American workers employees can benefit uh from their productivity and labor and you know we all say at least many of us say I think everyone in this room says we want to build an economy uh that works for everyone um we know it's one thing to say it it's another thing to do it um and this is a path to doing it it doesn't get us you know as fast where we want as fast as we may want to go uh but we need to start here and by creating the incentives um and aligning the in aligning the incentives uh with employee ownership uh I think we can take some very important steps to accomplishing uh those goals so again uh thank all of you who are part of this movement um we want to work very hard with you and partner with you to to get it done the good news as I said and you know is is bipartisan um and that will I think help us uh along the way so I appreciate uh your your your the opportunity to say a few words and most of all appreciate all that you're doing so thank you [Applause]