- A bipartisan effort is underway in the U.S. Senate to try and make it easier for startups and private businesses to give employees stock options, according to The Hill.
- The bill, from Sens. Mark R. Warner (D-VA) and Dean Heller (R-NV), which has a mirror image in the U.S. House of Representatives, would give employees up to seven years to pay taxes after exercising their stock options for non-public firms, The Hill reports.
- Stock options, which are a right to purchase company stock shares at a fixed price in the future, can be important tool for investing in and rewarding employees by boosting overall pay and retirement savings.
The Empowering Employees through Stock Ownership Act says stock options must be extended to 80% of workers, but majority owners, corporate officers and high-paid executives won't be eligible for the seven-year tax deferment.
“When employee ownership is spread across a growing business, it has a huge impact on workplace culture, productivity and wealth creation,” Warner said in a statement. "Extending employee stock programs to a broader universe of workers will strengthen business growth and create new economic opportunities, especially for rank-and-file workers."
"This legislation will allow for companies, like startups and other small businesses, to offer competitive compensation packages to attract and retain key talent,” Heller said in a statement. "When workers feel valued and appreciated, the sky’s the limit for both the employee and employer."
Chobani made headlines when its CEO rewarded employees with ownership stakes. It was an unusual, albeit generous, move. This law may allow others to follow suit.