Friday, February 19, 2016
Billy Long: Expanding production opportunities for business owners and employees
Across the Ozarks, I’ve met with many employee-owners who gladly speak first-hand about how crucial this model is to boosting company performance. Their stake spurs a crucial sense of responsibility toward success that rewards them and the company when goals are met. Also, it allows these businesses to compete for top-tier talent and draw them into their local economies.
Even by the numbers, the employee-ownership model overall proves to generate higher performance returns. Relative to their competitors, these business’ sales and productivity grow about two to three percent faster each year. Additionally, their employees will retire with about three times the assets as their competitor’s retirees.
Unfortunately, some companies are shifting away from the employee-ownership model because of federal regulations and outdated Securities & Exchange Commission (SEC) disclosure requirements. Currently, private companies offering more than $5 million in employee securities compensation must disclose strategic industry risk factors and copies of plans under which their employees’ offerings are made.
Forcing the release of this confidential information can be ruinous to businesses – especially smaller ones fighting for an industry foothold – if seen by the wrong competitor’s eyes. On top of posing this major risk, associated red-tape requirements cost these businesses valuable time that could be invested more wisely in their product’s market success.
In Congress recently, the House of Representatives reviewed legislation to provide employee-owned businesses much-needed relief. As part of a comprehensive regulatory relief package this month, the House passed an “Encouraging Employee-Ownership” (EEOA) provision to modernize the SEC disclosure threshold by raising it from $5 million to $10 million with adjustments for inflation every five years. In turn, this new disclosure threshold will allow businesses to focus more heavily on innovative ways to expand, and weigh more reliable options for offering their workers personal investments to increase productivity.
The Ozarks are home to some of the hardest working folks across America. Our entrepreneurial spirit and grit are evident in our large and small home-grown businesses. For each RPCS grocery, SRC Holdings, and Penmac, there are countless other employee-owned businesses looking to one day succeed at their level. It’s critical that they aren’t disadvantaged by archaic federal rules that only serve to suppress productivity and hard-earned employee compensation.
With more than 90 million Americans not participating in our labor force and median household income lower than it was in 2000, our economy is still fragile. Like the EEOA, I will continue fighting for policies that enable economic opportunities for Americans rather than regulating them, and remove even more big-government barriers that impede America’s return to economic prosperity.