Your Questions on ESOPs, Congress, and the Future of Employee Ownership

The next question comes from Eva Villasana, and she's asking what she'd like to know is, as we look forward to the next generation of employee owners, what legislation or government decisions are being made today that are going to have the greatest impact on the long-term strength and durability of ESOP companies? And I feel like, you know, I'm really grateful for this question because there are so many things happening both in Washington and at the state level.

And, you know, Jason, you've been a real leader in Wisconsin on this.

But at the federal level, I would probably say ESOPs and employee ownership, but really ESOPs, are getting a huge amount of attention in the Congress.

and in the administration because they have been so successful.

And they have really proven that they keep local job retention.

They prevent jobs from going overseas.

They genuinely spread wealth among a much larger community of individual employees.

ESOPs nationwide hold about $2 trillion worth of wealth now.

And you think about that, $2 trillion that has been accumulated over 50 years.

And those are only the ESOPs that are in existence.

And keep in mind, ESOPs go out of existence all the time.

They get bought.

They get sold.

So that $2 trillion is only a fraction of the total wealth that's been created in the last 50 years.

So what's happening is it's such a tremendously bipartisan issue that members of Congress, they're coming to us all the time saying, what can we do to create more of these? What can we do to make an environment that's more favorable? So to Eva's question, I would say that probably the most important thing that's happening right now is creating the regulatory clarity and the legislative clarity around how do you value, how do you create a value for the shares of a company owned by an ESOP? And how you create a business valuation, it's a very common thing.

It's like doing an appraisal on your house.

There are lots and lots and lots, there are millions of people who can do an appraisal.

But the trick is, will it satisfy the regulators? And will it be second-guessed? And the community has been seeking for over 50 years this regulatory clarity since e-software first formed.

And we are right on the cusp of getting that regulatory clarity.

And maybe you guys could expound a little bit on what that might mean in terms of creating more comfort within the business ownership community to form an ESOP and what it might mean in terms of operating an ESOP into the future.

Yeah, I think that that's going to give a tremendous amount of clarity when we receive that after this 50 plus years of kind of waiting patiently for clear regulatory oversight on the valuation process.

Because as we've stated previously, it's had a chilling effect.

on our industry and on new ESOP formation, because with that uncertainty, it creates that questioning mind.

And we wanna remove any of those barriers or restriction, and this is really gonna be huge for that moving forward.

And in the space, I think it causes business owners to potentially pause or they like to say it's too complicated when really it's not that complicated.