Utah Commonwealth Corporation Act
Where the framework first becomes law. A voluntary charter with real incentives, and an evaluation designed so that the answer can be no.
The federal instruments change the rules for everyone. The Utah Bill is different by design: it is voluntary, it rewards firms that choose stewardship rather than penalizing those that don't, and it is meant to win a first legislative session in a state whose political culture — pro-market, pro-property, skeptical of concentrated power — already holds the argument on this site as common sense. If, after several years, Commonwealth-certified companies hold up or outperform on retention, productivity, and long-term return — measured by an evaluator the program does not control — that record is what carries the framework everywhere else.
The three-tier framework
The tier structure is modeled on Colorado's employee-ownership legislation — proven incentive scaffolding without command-and-control mandates. Each tier adds obligations and unlocks additional incentives. Pay-ratio standards are embedded at each tier, using the same definitions of compensation and covered workforce as the Corporate Pay Accountability Act, so a Utah Preferred company is, by construction, inside the federal safe harbor.
| Tier | CEO ratio | NEO ratio | Board ratio | Key requirements | Incentives |
|---|---|---|---|---|---|
| Registered | Disclose | Disclose | Disclose | Annual pay-ratio disclosure on the Act's definitions. Transparency creates market pressure. Commonwealth Charter filed with the state. | Commonwealth designation. |
| Certified | ≤50:1 | ≤30:1 | ≤5:1 | Employee Stewardship Council. Ownership plan. AI Productivity Participation Plan. Stewardship Charter. Independent verification. | Colorado-style conversion tax credits. Reduced state corporate tax rate, capped. Procurement tiebreaker. |
| Preferred | ≤20:1 | ≤15:1 | ≤3:1 | Full Commonwealth standards. Tenure-weighted voting. Employee board representation. Tenure-based voting rights preserved through an employee's retirement and other terminal events. Independent stewardship audit annually. | Full incentive package, capped. Commonwealth Preferred designation and public recognition. Procurement tiebreaker. |
The AI Productivity Participation Plan
The Certified and Preferred tiers require a plan for how productivity gains from artificial intelligence deployed inside the firm are shared with the workforce that uses it — through wages, hours, or ownership. It is the one provision anywhere in the framework whose sole purpose is the question on the full argument: when AI raises a firm's output per hour, who keeps the difference? The early evidence says workers currently do not. A Utah firm that wants the Certified designation has to answer the question in writing and be verified against the answer.
The plan is not a statement of intent. It names a baseline chosen from the Act's menu — output per hour worked, or revenue per full-time-equivalent worker, measured over the two years before certification; it states the formula by which verified gains above that baseline are shared; and it names the form of the sharing — wages, hours, ownership, or a combination. The baseline is inflation-adjusted, and the Act shares gains above it whatever their cause: it does not attempt to isolate AI's contribution, which cannot be measured inside a firm. The Act does not prescribe the form of the sharing. It prescribes that the share and the form be stated in advance, measured against the baseline by the same independent verifier that certifies the pay ratios, and reported every year — and it sets a minimum share of verified gains below which a plan does not qualify (the draft proposes one-quarter; the number is the Legislature's to set). A plan with no baseline, no formula, or no verified sharing is not a plan, and a firm that files one loses the designation.
Why Utah first
How this gets gamed, and what stops it
A voluntary program invites a different kind of gaming than a mandate: joining for the benefits without the substance. Four ways to do it, and what the Act does about each.
Commonwealth-washing prohibition
The Act includes an explicit anti-greenwashing provision modeled on benefit-corporation enforcement. Any company claiming Commonwealth status without meeting the verified requirements faces civil penalties, mandatory public correction, and repayment of any incentive received. The designation must mean something or it means nothing.
The draft text
Version 2 of the Act — the three-tier framework — is a discussion draft for legislative review and is available on request. Version 3, which carries the October 2026 revisions on this page — the AI plan's baseline and verification requirements; the incentive caps, disclosure, and recapture; the procurement tiebreaker; and the pre-specified evaluation — is in preparation for the 2027 session. Comments welcome, particularly from Utah employers who would consider the Certified or Preferred designation and from practitioners who have worked with Colorado's employee-ownership credits.
Request the Version 2 draft Comment on the draft