New legislation to make the process of transferring business ownership to employees less onerous is sorely needed, a participant in a Long Island employee stock ownership plan said Monday.
Paul K. Boyce, president of Bohemia-based environmental engineering firm P.W. Grosser Consulting, made the remarks as Sen. Kirsten Gillibrand (D-N.Y.) held a news conference in Melville to promote her legislation on employee stock ownership plans (ESOPs).
The event, hosted by the Long Island Association, the region's largest business group, sought to build support for the Main Street Employee Ownership Act, which Gillibrand introduced in April.
The bill has several provisions designed to ease the way for the Small Business Administration to make loans used in converting a company to an ESOP structure.
A companion bill was introduced in the House by Rep. Nydia Velazquez (D-Brooklyn).
Gillibrand said that the legislation has bipartisan support, including Republican co-sponsors. The bill would offer an exit strategy for Baby Boomer business owners "who are getting ready to retire in the next few years," and a safety net for employees.
"It means that when the owner of a company retires, it's not suddenly going to make dozens of people unemployed," she said.
Boyce, who made remarks at the news conference and in a telephone interview, said that the conversion to an ESOP provided a path toward eventual retirement for chief executive Paul Grosser, who founded the company in 1990.
"We officially became an ESOP in December 2015," he said. "It hasn't been that easy. Once we started to peel the layers back on the onion, it became more doable."
Boyce said the ESOP owns about 11 percent of the company, Grosser has about 40 percent and senior level staff have about 49 percent.
A study from the Rutgers School of Management and Labor Relations found that the average worker in an ESOP company accumulated a stake worth $134,000.
The study, based on Department of Labor data, covered 1974 through 2014.