We missed those of you who were unable to join us in sunny Fort Lauderdale, FL for the 2014 ESCA Leadership Summit attended by 160 ESCA members and guests.
This ESCA members update will provide you with a brief summary of the Summit. If you would like further details about the ESCA Leadership Summit or ESCA’s upcoming activities in Washington and around the country, please don’t hesitate to contact Noelle Lundberg or Matt Pearce at nlundberg@vennstrategies.com or mpearce@vennstrategies.com.
The 2014 ESCA Leadership Summit started with the transition of the role of ESCA Board Chairman from Greg Klein, CFO of Inland Truck Parts, to former ESCA Policy Committee Chairman Steve Smith, Vice President and General Counsel of Amsted Industries. To honor Greg for his three years of outstanding leadership as Board Chair, ESCA presented a video tribute to Greg featuring five of ESCA’s congressional champions speaking about Greg, ESCA, and their support for private, employee-owned companies. Included in the video were Senate Finance Committee Members John Thune (D-SD) and Pat Roberts (R-KS), and House Ways and Means Members Ron Kind (D-WI-3), Lynn Jenkins (R-KS-2), and Erik Paulsen (R-MN-3). We all salute Greg for his leadership, tireless effort, and hard work over the past three years (that led to a 70% increase in ESCA’s membership!), and offer congratulations to Steve on his new position.
ESCA’s President & Executive Director Stephanie Silverman set the stage for the conference with her political update, analyzing the current political and policy climate in Washington D.C. and how it could impact S ESOPs. In the shadow of the 2014 midterm elections, and with divided government (Democrats control the White House and Senate, Republicans control the House), this Congress is on track to be one of the least productive ever. While there have been a few recent bipartisan moments (the Ryan/Murray budget deal and raising the debt limit), big ticket items like immigration and tax reform are unlikely to see meaningful action.
During the Summit, attendees learned that House Ways and Means Committee Chairman Dave Camp (R-MI-4) plans to release a tax reform discussion draft (not a bill) on February 26th. While House Republicans generally agree that tax reform is good in theory, it is politically risky to scale back or eliminate popular provisions in the tax code, making it unlikely that a tax reform bill will be voted on this Congress. We will report back to ESCA members once the proposal is released and we have reviewed it, but at this point do not believe that the proposal will directly address S ESOPs.
We heard firsthand from two Committee members about how important and effective ESCA’s engagement with the Committee has been during the tax reform process. Congressman Richie Neal (D-MA-1) spoke during the Summit’s opening session and highlighted how employee ownership is a solution to “income inequality” issues – a policy priority for many congressional Democrats. He also noted, “the model works and we should leave it the way it is.” At lunch, Rep. Erik Paulsen (R-MN-3) attributed the number of ESCA champions on the Ways and Means Committee and in Congress to the high levels of ESCA member engagement, participation in DC lobby days, and hosting Members of Congress for visits at their individual S ESOP companies. We appreciated Reps. Neal and Paulsen joining us again in Florida and sharing their perspectives, insights, and guidance on how ESCA can continue to work with them and their Ways and Means colleagues to promote and expand the S ESOP model in the House.
We were thrilled to have one of the leading Senate Democrat policymakers, Sen. Chuck Schumer (D-NY), join us for his first ESCA conference. Schumer will be the second ranking Democrat on the Finance Committee next year, and is a key figure in shaping the Senate Democrat Leadership’s agenda. He spoke highly of the S ESOP model and mentioned the broad support it has in Congress. The Senator also touched on the theme that S ESOPs can help address income inequality issues by being a “ladder up” for the middle class.
While the lineup of Congressional speakers at this year’s ESCA conference was impressive, the entertainment on Thursday night at the “ESCA-lympics” dinner event was also memorable. Russian-born comedian Yakov Smirnoff was both funny and poignant during his show. ESCA members enjoyed the opportunity to socialize and network in the Winter Olympic Wonderland.
Again, thank you to the ESCA members who joined us! We look forward to an active year and will need all of you to ensure that, in the words of new Chairman Steve Smith, “ESCA stays strong” to protect the S ESOP structure for generations of employee-owners to come.