00:00Senator Marshall.
00:01Thank you, Mr. Chairman.
00:02And another red-letter day that Senator Sanders and I agree on something.
00:06So we always got to mark these days down, so I appreciate both of y'all's leadership on this.
00:12Of all the business models out there, ESOP is one of my favorites.
00:16I think it's one of my favorites when I go visit them.
00:19The employees have a hop in their step.
00:22It's more than just getting a paycheck.
00:24They're working for the future.
00:26I bet you have incredible employee satisfaction and customer satisfaction because of those ESOPs.
00:32It's an area that I dove into before I got here.
00:36As I was looking towards economic development in small communities,
00:40what could be done to keep these companies from being sold to the East Coast or West Coast companies?
00:46And even more concern is ownership out of the country.
00:51And what I found was President Reagan, that was a big reason he wanted to expand these,
00:56was to prevent foreign ownership of local companies and keep those jobs there.
01:01So congratulations to all the ESOPs.
01:036,000 employees, employee owners in Kansas, Burns & Mack, Eagle Radio, J.E. Dunn,
01:10Bayer Construction, Inland Trucking, and I could go on and on and on.
01:14And again, you can just tell an ESOP company the second you walk through the door how you're greeted.
01:20They provide job stability, employment, boost wages, and, of course, just this incredible retirement plan.
01:27Now I want to address our bill, Retirement Through Ownership Act.
01:31And thank you, Senator Cain, for your leadership on this bill as well.
01:35This is something that should become law.
01:37As I understand it, if you're not a publicly traded ESOP and you have to do a valuation of this company, it's a challenge.
01:47And, Mr. Rourke, maybe could you help address why this is important that we address this valuation issue?
01:55Yes, it's very important.
01:57One of the challenges as you go through this is the uncertainty, I think.
02:01Is your mic on?
02:02Yes, maybe I need to lean in.
02:04There you go, lean in.
02:04One of the challenges is the uncertainty leads to a diminished valuation sometimes because of the nervousness of the evaluator or the rules and just the fear of being sued.
02:18One of the concerns I have as a person who wants to remain as an ESOP long-term is that if that valuation comes in too low, someone coming in from the outside may offer such a substantial offer that I would get forced into looking at a sale.
02:36It would be nice if those things were well-defined and that we could get the valuation more consistent with the public markets.
02:44Maybe it doesn't need to be quite as high as the public markets, but it certainly needs to be reasonable, and there is often uncertainty in those valuations.
02:53So, sir, we want to get the right valuation.
02:55We want to get the right valuation.
02:55We want to get the right valuation.
02:57Mr. DePuy, do you have anything you would add to the importance of this issue?
03:00No, no, Senator, I don't, but that is an issue that I have come across, and the question came up earlier is, you know, do we experience companies that are hesitant to do this?
03:11Yes, and I will tell you that in my 20-ish years with Acadian, I've probably spoken to about eight or ten companies that, once I went through the explanation of how it all works, kind of shied away from it, and I don't think any of them ever went.
03:26Right.
03:26What it does is creates uncertainty.
03:28It does.
03:29It creates uncertainty, I think, is the word that I would use, and we've been waiting over 50 years for a little bit clarification on the rules.
03:37Exactly.
03:38Mr. Barton, you have King Arthur Baking Company.
03:41I wonder if you could just speak to how good Kansas wheat is, that it's got a high-protein content, it's the best for baking, and just anything you want to add about how good Kansas wheat is for baking?
03:54No objections whatsoever.
03:57I just want to.
03:57We have many, many partners in Kansas.
04:00You know, I always brag that Kansas has high-protein in it, and it's one more reason why Kansas wheat is better than French wheat, because it truly is better for baking.
04:11Absolutely.
04:12One of our claims to fame, and one of the reasons why bakers continue to come back, is our consistency in protein, where we don't necessarily have swings that other flours do, and we have your farmers to thank for that.
04:26Yeah, you know, if you have a wedding cake, and this is the, you know, your big event, you need consistent protein in that flour, right?
04:33100%.
04:33Yeah, thanks for agreeing with me on that, as well.
04:37Mr. Blasi, what are your biggest challenges right now as an ESOP?
04:43And beyond just the law right now, what other challenges are you seeing in your organization?
04:51ESOP companies also have to figure out how to have a supportive corporate culture, how to have employee participation in solving real company problems at the job level, at the department level, where employees can make an important difference.
05:07ESOP companies need to look towards expanding profit sharing and gain sharing for short-term results.
05:13So it's combining the corporate culture with the greater financial advantage to employees.
05:19That's the real thing.
05:20And I guess one more time, I apologize.
05:22I was hoping you would say the cost of health care, and that we need more transparency in health care.
05:26But I thank you, everyone, for joining us here, and we're rooting you on.
05:30Thank you, Chairman.
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