Reward Work Act

Key Points

• The bill would ban all public companies from buying back their own stock on the open market. This practice, which companies use to boost share prices and reward shareholders, would become illegal on national securities exchanges.
• The bill eliminates the existing SEC safe harbor rule (Rule 10b-18) that currently shields companies from market manipulation charges when conducting buybacks. Without this legal protection, open-market repurchases would carry significant legal risk even beyond the explicit ban.
• At least one-third of every public company's board of directors would need to be elected by the company's employees through a one-employee-one-vote process. This would give workers direct influence over corporate decisions on pay, investment, and strategy.
• The SEC, working with the National Labor Relations Board, would write new rules to make sure worker board elections are fair and democratic. Companies would have two years after the law passes to put employee-chosen directors on their boards.
• Traditional tender offers would still be allowed under the bill. The ban specifically targets open-market share repurchases, not all forms of stock buybacks.