AEE Endorses Bill to Lower Barriers for Employee Ownership Companies
WASHINGTON—The Alliance for Entrepreneurial Equity’s Director, Imani Augustus, issued the following statement ahead of the Senate Small Business Committee’s hearing entitled Succession Planning: Opportunities to Build Wealth and Keep Jobs in Local Communities.
“Nearly 40% of minority-owned businesses have owners who are at or approaching retirement age, and only a third have a succession plan. While some businesses may be passed on to family members, many more will risk closure unless a buyer can keep the doors open. This puts thousands of businesses and millions of jobs in jeopardy.
“Today’s hearing on succession planning takes an important look at the massive threat that small business closures pose to local economies and puts forward wealth-building solutions that could transfer ownership to company employees through Employee Stock Ownership Plans. ESOPs provide a unique opportunity for employers to reward their hardworking teams with retirement security. Unfortunately, women and minorities are underrepresented in the workforces of ESOP companies and do not yet enjoy their benefits at rates similar to their male and white counterparts.
“That is why the Alliance for Entrepreneurial Equity is proud to support S. 2515, the Promotion and Expansion of Private Employee Ownership Act. This bill eases barriers facing businesses seeking to adopt the ESOP model, ensures minority businesses that become ESOPs retain their SBA certification, and creates an advocate for employee ownership in the federal government for the first time in history. We hope this bill encourages more businesses, particularly those owned by women and people of color, to consider an ESOP as a succession option and that female and minority workers would have more opportunities to enjoy retirement security through this model.”