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Witness vows to 'end the war on ESOPs' in exchange with Sen. Murkowski
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Summary
A witness told the Senate committee he supports employee stock ownership plans (ESOPs) and pledged to curb what he called excessive Department of Labor enforcement of ESOP valuations, arguing for clarity on 'good faith' valuation standards.
Senator Murkowski raised concerns about the lack of a clear regulatory definition for "good faith effort" in valuing ESOP stock and asked whether the Department of Labor has been taking overly aggressive enforcement actions.
Murkowski said stakeholders worry that, without a single clear definition in regulation, ESOP valuations have been subject to a "patchwork" of litigation and investigations and expressed concern about excessive Department of Labor enforcement.
Mr. Ronowitz, the witness, replied that he believes "Congress wants ESOPs," criticized what he described as two decades of Department of Labor scrutiny and pledged to end what he termed a "war on ESOPs." "I will end the war on ESOPs," he said, adding that ESOPs are an important way for employees to gain ownership and benefits and that, absent a clear conflict of interest, independent valuation firms should be allowed to perform valuations.
Senator Murkowski responded that ESOPs are valued in many Alaska communities both for business continuity and for employee security and thanked Ronowitz for his answer. The exchange did not produce a formal commitment to a specific regulatory change; the witness’s pledge would be subject to any confirmation process and future departmental actions.
