ESCA, the Employee-owned S Corporations of America, is the voice in Washington, DC that speaks exclusively for employee-owned S Corporations (“S ESOPs”). Since 1998, ESCA’s membership has grown to represent more than 245,000 employee-owners across the country. ESCA company members engage in a broad spectrum of business activities and are a variety of sizes – from 25-person businesses to companies with 22,000+ employee-owners – but all have one thing in common: a commitment to protecting the S corporation ESOP structure and promoting it so that more working Americans can become employee-owners.
As an organization that is both company-sponsored and company-directed, ESCA is a reflection of the members it represents. ESCA’s government affairs efforts are led by a team of highly-regarded political and legal professionals who work at the direction of ESCA’s leadership, comprised of member companies.
Today, S ESOPs accomplish exactly what Congress intended them to do – they create and sustain resilient jobs, generate far-reaching economic activity, and promote strong retirement savings.
A Subchapter S corporation is a business entity that provides flow-through tax treatment to its shareholders. An employee stock ownership plan (“ESOP”) is a qualified, defined contribution plan that provides a company’s workers with retirement savings through the opportunity to invest in their employer’s stock, all at no cost to the worker. An S ESOP company is a private pass-through business that is owned wholly or partly by an ESOP, and as a result, the company’s gains rebound to the benefit of its employee-owners.
Dave Copham of Liberty Check Printers goes to the S Corporation Association (represented by Stephanie Silverman) to ask for an ESOP provision to be included in S Corp Modernization bill.
The Small Business Job Protection Act of 1996 creates S corporation ESOPs effective January 1, 1998.
The “Taxpayer Relief Act of 1997” repeals the application of the UBIT to an ESOP’s share of S corporation earnings.
Sen. John Breaux (D-LA) leads the continued effort in support of ESOPs (taking over the ESOP legacy from Sen. Russell Long.)
The S corporation ESOP structure is effective January 1, 1998. Dave Copham, owner of Liberty Check Printers, completes the sale of his S corporation to the employees by way of an S corporation ESOP.
The Clinton Administration’s budget proposes repealing the UBIT exemption for S ESOPs.
The Committee to Preserve Private Employee Ownership (CPPEO) – a subcommittee of the S Corporation Association, not a new entity – is formed. Seven companies are on the initial Board: Amsted, Austin, Ferrellgas, Lifetouch, Stevens, Sammons & Liberty.
ESCA is formally established as a permanent entity. Its mission is to protect the interests of S ESOPs in Washington, DC.
ESCA spearheads the passage of Breaux/Ramstad anti-abuse legislation that draws a line between broad-based S ESOPs and other structures, ensuring the survival of broad-based S ESOP companies. The provision is included in the Economic Growth and Tax Relief Reconciliation Act.
The Senate passes a revised pension bill, and ESCA ensures that the legislation contains key language protecting the economic interests of S corporation employee-owners.
ESCA secures a provision in the “American Jobs Creation Act”, which is passed by Congress and signed into law by the President, to assist leveraged ESOPs.
ESCA releases a study it commissioned from the National Center for Employee Ownership (NCEO) which finds that employee-owners receive substantially greater benefits by participating in S ESOPs than from other retirement plans.
The President signs into law the “Pension Protection Act of 2006.”
ESCA publishes Working Capital to share personal stories from employee-owners of S Corporations across the country. These stories demonstrate first-had how S ESOPs enrich the lives of employee-owners, the community and the economy.
Fifteen House members sign a letter to the House Ways and Means Chairman and Ranking Member in support of S corp ESOPs.
Reps. Ron Kind (D-WI) and Earl Blumenauer (D-OR) introduce H.R. 3586 “The S Corporation ESOP Promotion and Expansion Act of 2009.”
ESCA PAC is launched.
Reps. Ron Kind (D-WI) and Earl Blumenauer (D-OR) send a letter to Treasury in support of S ESOPs.
Sens. Blanche Lincoln (D-AR) and Pat Roberts (R-KS) introduce S. 3803 “The S Corporation ESOP Promotion and Expansion Act of 2010.”
A record 33 new company members join ESCA in 2011.
S ESOP study authored by Alex Brill released.
Alex Brill releases follow up analysis to 2012 S ESOP study.
ESCA hosts ESOP Policy Roundtable at the National Press Club.
EY releases S ESOP performance study.
ESCA reaches 213 total members.
ESCA releases new study (“Employee ownership, ESOPs, wealth and wages”) by economist Jared Bernstein exploring employee ownership in the context of wealth inequality and capital ownership in January.
ESCA partners with NCEO in August on a joint report (“Economic Growth Through Employee Ownership”) spotlighting how states can promote employee ownership at the local level.
ESCA releases a 2017 report by Alex Brill comparing the number of S ESOP conversions to other business exit strategies. Brill’s findings suggest that policies incentivizing owners of privately held companies to pursue an S ESOP as an exit strategy can boost U.S. job stability.
A survey released in May by John Zogby Strategies finds that employees who work at private, employee-owned companies are more confident about their jobs and less anxious about their financial futures than non-ESOP workers.
S ESOP legislation (H.R. 2092/S. 1589) reaches an even larger level of Congressional support with 126 bipartisan House and Senate cosponsors of at the end of the 115th Congress.
ESCA member companies host 52 district events (a new record) across the country in 22 states.
A survey released by John Zogby finds that millennials working at employee-owned companies are far better prepared for retirement than other working millennials.
ESCA launches the “Employees First Campaign” to promote the efforts by ESCA companies to keep employees safe, protect jobs and benefits, communicate to employee-owners and give back to their communities.
ESCA releases new study (“Why Aren’t There More? Assessing Barriers to ESOP Creation”) by Jared Bernstein. Mr. Bernstein joined the Council of Economic Advisors under President Biden on January 20, 2021.
The bipartisan retirement security bill, known as “SECURE 2.0,” that passed into law in December 2022 as part of the FY 2022 Omnibus Appropriations package updates Section 1042 to include S Corporations – a provision pulled directly from ESCA’s pro S ESOP bill.
ESCA celebrates 25 years since the S corporation ESOP structure was established with the enactment of the Small Business Job Protection Act of 1996 that allowed S corporations to be owned by an ESOP trust.