Luján, Pocan, Lynch, Boyle, and Schakowsky Introduce House Companion of Senator Warren’s Accountable Capitalism Act
WASHINGTON, DC (December 13, 2018) – U.S. Representatives Ben Ray Luján (NM-03), Mark Pocan (WI-02), Stephen Lynch (MA-08), Brendan Boyle (PA-13), and Jan Schakowsky (IL-09) introduced H.R. 7294, the House companion of Senator Elizabeth Warren’s (D-MA) Accountable Capitalism Act.
Senator Warren introduced the bill in August to help eliminate skewed market incentives and return to the era when American corporations and American workers did well together. The legislation empowers American workers and aims to reverse the harmful corporate trend over the last thirty years that have produced record corporate profits for American companies but stagnant wages for American workers.
“I’m proud to partner with Representatives Luján, Pocan, Lynch, Boyle, and Schakowsky on this bill to empower American workers,” said Warren. “With the support of this powerful group of House leaders, we’re one big step closer to helping American workers get the higher wages they deserve.”
“Throughout our country’s history, the well-being of our workers has been directly linked to the prosperity we have achieved as a nation,” said Luján. “Yet today, working families in my district and across the country face rising costs of living and stagnant wages. Elevating the voices of workers in our corporate boardrooms will help restore balance in our economy. The Accountable Capitalism Act is an innovative and commonsense approach to level the playing field. I thank Senator Warren for her partnership on this effort.”
“Today, it’s more important than ever that we give American workers the opportunity to have a seat at the table to make critical decisions on their rights and their future. Unfortunately, runaway corporate power is causing more benefits to flow to shareholders and CEOs, while families are struggling to make ends meet,” said Pocan. “I’m proud to join my colleagues in introducing the House companion bill to Sen. Warren’s Accountable Capitalism Act to take a strong step forward leveling the playing field for America’s middle class. Together, we will empower American workers and build an economy that works for everyone.”
“I am proud to join my colleagues Representatives Luján, Pocan, Boyle and Schakowsky to introduce the House companion Bill to Senator Warren's legislation,” said Lynch. “Hopefully this Bill will help to rebalance the relationship for workers and give employees a stronger voice in the workplace.”
“American workers feel the system is rigged against them – and they’re right,” said Boyle. “Washington has only exacerbated this trend. Look no further than the Republican tax scam and the record profits, stock buybacks, and stagnant wages we’ve seen since. Clearly we can no longer afford to sit back and hope corporations act in the best interests of their employees. The Accountable Capitalism Act represents a great step toward making that a reality.”
“For the past 40 years, economic growth has gone to the top one percent, and workers have seen their wages stagnate and their jobs shipped overseas,” said Schakowsky. “Even with high profile examples like General Motors announcing its intent to perversely kill roughly 15,000 American jobs leading to its stock price increasing by five percent, the Republican majority over the last eight years has done nothing to right this wrong. In fact, Republicans have made things much worse by crafting that misguided tax bill. That is why I have chosen to be an original cosponsor of the Accountable Capitalism Act, a bill that will ensure the American economy gets back on track and works for everyone, not just the wealthy. I am proud to stand with my friend and incoming Assistant Speaker, Ben Ray Luján, on this important bill.”
Since the passage of the Republican tax bill, American companies have done more than $800 billion in stock buybacks, while real wages for workers remain stagnant. There is an urgent need to end the grip of shareholder value maximization and return to the era when American corporations produced broad-based growth that helped workers and shareholders alike. The Accountable Capitalism Act:
- Compels company directors to consider the interests of all corporate stakeholders - including employees, customers, shareholders, and communities in which the company operates - by requiring American corporations with $1 billion or more in annual revenue to obtain a federal charter as a “United States corporation.” This approach is derived from the thriving benefit corporation model that 33 states and the District of Columbia have adopted and that companies like Patagonia, Danone North America, and Kickstarter have embraced with strong results.
- Empowers workers at United States corporations to elect at least 40% of Board members: Borrowing from the successful approach in Germany and other developed economies, a United States corporation must ensure that no fewer than 40% of its directors are selected by the corporation's employees.
- Restricts the sales of company shares by the directors and officers of United States corporations: Top corporate executives are now compensated mostly in company equity, which gives them huge financial incentives to focus exclusively on shareholder returns. To ensure that they are focused on the long-term interests of all corporate stakeholders, the bill prohibits directors and officers of United States corporations from selling company shares within five years of receiving them or within three years of a company stock buyback.
- Prohibits United States corporations from making any political expenditures without the approval of 75% of its directors and shareholders: Drawing on a proposal from John Bogle, the founder of the investment company Vanguard, United States corporations must receive the approval of at least 75% of their shareholders and 75% of their directors before engaging in political expenditures. This ensures any political expenditures benefit all corporate stakeholders.
- Permits the federal government to revoke the charter of a United States corporation if the company has engaged in repeated and egregious illegal conduct: State Attorneys General are authorized to submit petitions to the Office of United States Corporations to revoke a United States corporation's charter. If the Director of the Office finds that the corporation has a history of egregious and repeated illegal conduct and has failed to take meaningful steps to address its problems, she may grant the petition. The company's charter would then be revoked a year later - giving the company time before its charter is revoked to make the case to Congress that it should retain its charter in the same or in a modified form.
The bill summary is available here.