Bill Overview
Title: Reward Work Act
Description: This bill prohibits issuers from purchasing their own securities on a national exchange. The bill also requires one-third of an issuer's board of directors to be elected by employees in order for the issuer to be allowed to register securities.
Sponsors: Rep. Garcia, Jesus G. "Chuy" [D-IL-4]
Target Audience
Population: Investors, employees, and executives of publicly traded companies
Estimated Size: 150000000
- The bill restricts stock buybacks, which can affect overall company financial strategies and market prices, impacting investors globally.
- Requiring one-third of board members to be elected by employees impacts corporate governance structures, affecting how decisions are made at potentially thousands of companies.
- This legislation could influence corporations' employee relations and might encourage more democratic processes within companies, affecting millions of employees worldwide.
Reasoning
- This policy focuses on influencing corporate governance and financial strategies via restricting stock buybacks and mandating employee-elected board members, directly affecting companies listed on major US stock exchanges.
- Approximately 150 million Americans could be impacted, including investors who rely on stock performance for their financial security, employees now taking on additional governance roles, and executives adjusting to new strategies.
- Considerations include a variety of corporations of different sizes and industries, ensuring the policy's impact is assessed across this spectrum while balancing for budget constraints.
- The budget allocations suggest moderate outreach and communication, affecting about one-third of the target population actively in year one, while setting up longer-term governance structures.
- The policy may directly benefit employees gaining greater voice in corporate governance, but could indirectly influence broader financial and market perceptions, impacting investors and potentially lowering stock values temporarily.
Simulated Interviews
Software Engineer (Austin, Texas)
Age: 32 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 12/20
Statement of Opinion:
- I appreciate having a say in the board elections as it can potentially improve workplace conditions and policies.
- I am concerned about how this could affect the company's stock value in the long run.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
Investment Banker (New York City, New York)
Age: 45 | Gender: male
Wellbeing Before Policy: 9
Duration of Impact: 2.0 years
Commonness: 8/20
Statement of Opinion:
- Restricted stock buybacks could negatively affect my clients' market positions and stock prices.
- This policy might lead to more democratic and employee-friendly governance within companies.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 9 |
| Year 2 | 6 | 9 |
| Year 3 | 6 | 8 |
| Year 5 | 7 | 8 |
| Year 10 | 8 | 9 |
| Year 20 | 9 | 10 |
Startup Founder (San Francisco, California)
Age: 29 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 10/20
Statement of Opinion:
- Being able to directly elect board members is an intriguing prospect to attract top talent.
- Concerned about potential limitations on strategic financial maneuvers like buybacks.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 6 |
| Year 20 | 8 | 6 |
Corporate Executive (Chicago, Illinois)
Age: 58 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 7/20
Statement of Opinion:
- Employee-elected board members could diversify perspectives, but may slow decision-making processes.
- We need to adjust our financial tactics without the leverage of buybacks.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
HR Manager (Miami, Florida)
Age: 39 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 11/20
Statement of Opinion:
- I'm optimistic about improved employee engagement and morale with potential board election power.
- We might see shifts in our stock incentives and compensation packages.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 8 |
Retail Investor (Seattle, Washington)
Age: 50 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 15/20
Statement of Opinion:
- I fear that changes to stock buyback policies might reduce my portfolio's value.
- This could, in the long run, encourage more sustainable corporate governance.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 5 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 7 | 6 |
Union Representative (Denver, Colorado)
Age: 42 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 8.0 years
Commonness: 9/20
Statement of Opinion:
- This policy is a victory for workers' rights and could shift the balance of power in companies.
- There's uncertainty about the long-term financial impacts on the companies and employee jobs.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 9 | 7 |
| Year 3 | 9 | 7 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 7 | 6 |
Accountant (Dallas, Texas)
Age: 55 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 4.0 years
Commonness: 14/20
Statement of Opinion:
- I foresee increased complexity in accounting processes with employee-elected boards and buybacks being restricted.
- It might stabilize and improve employee satisfaction over time.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 6 |
Graduate Student (Los Angeles, California)
Age: 25 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 11/20
Statement of Opinion:
- This offers a unique case study for analyzing impacts on corporate governance.
- Could lead to innovative changes in how companies are run, aligning more with employee interests.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 9 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 8 |
Retired Executive (Boston, Massachusetts)
Age: 62 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 6/20
Statement of Opinion:
- I'm skeptical about not allowing buybacks, it was a strategic tool for financial health during my time as an executive.
- Employee representation on boards could align company strategies more with workforce needs.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 8 | 7 |
Cost Estimates
Year 1: $250000000 (Low: $150000000, High: $350000000)
Year 2: $260000000 (Low: $160000000, High: $360000000)
Year 3: $270000000 (Low: $170000000, High: $370000000)
Year 5: $290000000 (Low: $190000000, High: $390000000)
Year 10: $330000000 (Low: $230000000, High: $430000000)
Year 100: $600000000 (Low: $500000000, High: $700000000)
Key Considerations
- The administrative and financial restructuring costs associated with the bill are primarily borne by the corporations and not directly by the government.
- Potential for both short-term corporate pushback and long-term benefits, including improved governance practices and workforce engagement.
- Monitoring and enforcement would require regulatory adjustments, which carry implied costs in administration.