Vote Notes: H.R. 1343, the Encouraging Employee Ownership Act
The saying is that from little acorns mighty oaks grow.
Apple, Google, and others began this way. First an idea. Second, a start...and then things grew from there.
In this light, the House passed H.R. 1343, the Encouraging Employee Ownership Act, today, and it simply updated an outdated regulation to make it easier for startup companies to pay their employees with company stock. The bill passed by a vote of 331-87, and I voted in favor of it.
This vote was about the competitiveness of our country and the way in which we can be a home to the incubation of new ideas. This does not mean just places like Silicon Valley, but it means cities like Charleston. For instance, Ceterus, an online accounting startup, and PureCars, a company that provides digital marketing services for automotive dealers call the lowcountry home. While startups in Silicon Valley and Charleston are separated by an entire continent, they share many of the same obstacles to success. One of the biggest challenges is keeping initial salary costs low while the company develops its product and brings it to market.
While many startups compensate their employees through stock in the company, they are limited to how much stock they can issue in a year without having to file extensive financial information with the federal government. That can work fine for a big company but does not fit with a start-up.
H.R. 1343 would simply update existing law and increase that limit from $5 million $10 million and ensure that limit rises in the future to account for inflation. Updating the law will hopefully help out many of these new businesses opening across the country and clear the way for the next Google or Facebook….with a start I hope in the Lowcountry!