OEOC

The Ohio Employee Ownership Center

Tag Archives: ESOP

Time to Reserve a Spot for the May 21 CEO/CFO Networking Dinner

Our Popular CEO / CFO Networking Dinner

Will be in Columbus!

Tuesday, May 21

SAVE THE DATE & RESERVE A SPOT
by calling the OEOC at 330-672-3028
or emailing the name, title, company, and email address of anyone in your company who will be attending to oeoc@kent.edu.

“Visit Star Leasing, have dinner, and network”

Star Leasing Company, headquartered in Columbus, has been providing a quality one-source solution to its customers’ semi-trailer needs since 1974. Star Leasing’s overall objective is to be the “One Solution” (Rent, Lease, Sell, Maintain) for semi-trailer needs for all of their customers. The company provides tailored lease and rental programs for semi-trailers including complete maintenance service with full service locations in Ohio, Indiana, Georgia, North Carolina and Alabama. Star also provides trailer maintenance for customer owned equipment. Their typical customers are private & contract transportation fleets and motor carriage companies. Star became 100% employee owned in 1987 and has nearly 200 active employees.

To learn more about Star Leasing, visit its website at www.starleasing.com

star leasing 1
star leasing 2
star leasing 3

This event, always popular with ESOP company executives, will be hosted by Jeff Rosen CFO at Star Leasing. Join your fellow ESOP managers to observe this very unique company and share ESOP ideas. There is no charge for this event. We welcome top management from ESOP companies to attend, not necessarily only those with CEO and CFO titles.

The session will include a company tour, dinner, networking and Q & A.

Tentative agenda:
4:30pm – Arrive, refreshments/networking and Star Leasing tour
6:30pm – Dinner, and Question & Answer Session
8:30pm – Ajourn

For reservations please call the OEOC: 330-672-3028

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Bipartisan Bill Introduced in Support of Employee Ownership (S. 742)

On April 17, Senator Ben Cardin (D-MD) and Senator Pat Roberts (R-KS) introduced bipartisan legislation based on a survey released by the Employee Benefit Research Institute stating that 28% of Americans worry that they won’t have enough money to retire. According to Cardin and Roberts, Employee Ownership offers a sound solution to this problem.

Far too many Americans are inadequately prepared for retirement. Our legislation is about helping workers save by giving businesses the tools they need to create jobs and promote adequate retirement savings.  It will strengthen a structure that promotes employee-ownership and helps workers build secure retirements…
-Senator Ben Cardin

Alex Brill of the American Enterprise Institute and CEO of Matrix Global Advisors, argues that employee stock ownership plans have higher productivity and resilience. The bill introduced by Roberts and Cardin would encourage the formation of S-Corp ESOPs, because this type of ESOP has been particularly successful in terms of longevity, wages, and growth.

S ESOPs have also proven more resilient in the face of economic distress, outperforming other private U.S. employers during the recent recession.
-Alex Brill

Among the positive impacts of an S ESOP according to Brill are $77 billion in labor income, $246 billion in output, and $27 billion in tax revenue from 1.4 million jobs. More details on the Brill’s research can be found in his study, Macroeconimic Impact of S ESOPs on the U.S. Economy.

More information on the proposed bill, Promotion and Expansion of Private Employee Ownership Act of 2013 (S. 742):

New Issue of Owners @ Work Now Available

Cover imageCovered in this issue:

  • We the Owners: Telling the Employee Ownership Story With Images–An Interview with Mary Ann Beyster
  • George Cheney Returns to Mondragon
  • The Myth of the ESOP as a Gift
  • OEOC Answers Questions About Crowdfunding
  • The Cooperative Development Center at Kent State University: Celebrating the “International Year of the Cooperative”
  • Ohio ESOP Update: Ohio’s ESOP Companies Regain Ground Lost to the Great Recession, While Paying Almost $16 billion to Retirees and Beneficiaries

Available in 3 web-optimized formats:

Employee Ownership News: Employee-Owned Companies Celebrate Milestones

Earlier this month, SS&G, an employee-owned accounting firm based in Montrose, Ohio, celebrated their 25th anniversary. SS&G began with only 2 employees, and since then the firm has grown to become the 41st largest accounting firm in the US with more than $70 million in revenue last year and more than 450 employees. To celebrate their anniversary, the firm hosted a luncheon program for the Greater Akron Chamber’s Young Professional Network members. Read more on this story from the Beacon Journal.

Business Wire recently announced the accomplishments of Neuberger Berman since they converted to employee-ownership three years ago. In their goal to become 100%  employee owned, the company committed to and began payments on equit purchases from Lehman Brothers Holding in April 2012. Since March of 2011, they have acquired $11.5 in new institutional business and increased mutual fund assets  by 11%.

Long Island Business News reported that the employees of Peerless Electronics have purchased 100% of the firm through an ESOP as of May 30. The executives agreed that an ESOP was the best way to “ensure the continued success of Peerless for the benefit of its employees, customers and suppliers.

An ESOP Top Ten: Issues to Consider

This article appeared in the New South Chapter of the ESOP Association quarterly newsletter and was shared by Bradley Arant Boult Cummings LLP.

When considering, creating and administering an ESOP, there are some important issues that should be considered including valuation, diversification, the role of employee owners, and debt services.

Regardless of how an ESOP is used, there are some unique concerns that plan sponsors, trustees, and other fiduciaries of such plans should consider in connection with the creation and ongoing administration of the ESOP.

Read the entire article here.

Employee Ownership Drives NE Ohio’s Economy

The Cleveland Plain Dealer, as part of their special section in Sunday’s paper on small business in Ohio, highlights a number of ESOP companies and how they use employee ownership as a tool to “enhance attitudes and performance.” Some nice quotes…

“We’ve had a tremendous string of growth in the last 10 years,” said Daniel Sedor, president and chief executive officer. “Employees have seen their stock value triple.”

“I think as employee owners you take more pride in what you’re doing,” said Cherie Weaver, marketing coordinator for Prentke Romich. “That’s the way I feel about it and I’ve been here 28 years.”

“As an employee-owned company, Oswald Companies has a heightened sense of urgency when it comes to service and performance, as we have a vested interest in our clientele and the communities we serve,” said Marc S. Byrnes, the company’s chairman and chief executive officer.

The piece also features an interview with our very own Jay Simecek. Well worth a read!

Ohio’s Award-Winning Employee Owners

CTL Engineering is OH/KY Employee-Owned Company of the Year – CTL Engineering was named the 2011 Employee-Owned Company of the Year by the OH/KY Chapter of The ESOP Association. CTL is 85% employee-owned through an ESOP established in 1998. Combining strong management with employee ownership and involvement that includes strategic planning, the Columbus-headquartered, firm has 250 employees in nine offices in OH, IN, and WV. CTL provides engineering, testing, analysis and consulting services in environmental, geotechnical, roofing, forensic and civil engineering areas.

Perry Corporation’s ESOP Video Wins National Communication Award – Perry Corporation of Lima took The ESOP Association’s Annual Award for Communications Excellence (AACE) in the Audio Visual category.  TEA President, Michael Keeling, praised the video for its use of humor to communicate the link between ESOP participation and the long-term rewards of ownership and business success. Featuring a Gilligan’s Island theme with Perry’s ESOP committee members dressed as the show’s TV characters, the video was enjoyed by hundreds of attendees at the TEA 34th Annual Conference and AACE exhibit in Washington DC.

CTL’s Becky Carroll is OH/KY Employee Owner of the Year – Becky Carroll, Payroll Administrator of CTL Engineering, is the 2011 Employee Owner of the Year for the Ohio/Kentucky Chapter of The ESOP Association. With 11 years at the firm, she serves on CTL’s ESOP Education Committee, also known as the Fun Czars, whose three members lead and promote “celebration, teaching, learning, and ownership” company-wide. “As a member of the ESOP Education Committee, it is my duty to educate our employees on the importance of the ESOP.  I feel I make a difference when employees take ownership and pride in where they work,” she remarked.

PRC’s Team wins OH/KY Group Excellence Award – The ESOP Communication Committee of Prentke Romich Company was selected by the Ohio/Kentucky Chapter of The ESOP Association as the winner of the 2011 Group Excellence Award. This annual award acknowledges companies that have excelled in communicating the ESOP  and its meaning to the company’s employees. PRC is a worldwide leader in the development and manufacturing of augmentative communication devices and other assistive technology for people with speech and other disabilities. PRC is 100% employee-owned through their ESOP established in 2003. Headquartered in Wooster, the firm employs 165 people worldwide. The ten members of the ESOP Communication Committee represent each area of the company.  They develop company-wide education through the internet, annual participant meetings, small-group birthday lunches with their company president, matching of  new employees with senior employees, and learning games with cash prizes.

Andrew Kulesza is 2011 Outstanding TEA Board Member – Andrew Kulesza, CFO/Treasurer of RE Kramig & Co., headquartered in Loveland, was named the 2011 Outstanding Board of Governors Member by The ESOP Association for his volunteer service and strong support of the Association’s government affairs activities. “Andrew has worked enthusiastically to advance the cause of employee ownership, particularly with leading think tanks and federal officials,” said J. Michael Keeling, ESOP Association President.

Ohio Community of Care Center Goes 100% Employee Owned

Note: In addition to highlighting news about employee ownership, small business issues, and other interesting items from around the country and the world, we plan on using this blog to highlight interesting news and events from employee-owned businesses in our own backyard of Ohio. This first entry comes from Karen Thomas, Program Coordinator of Ohio’s Employee-Owned Network.

Congratulations to the employees, residents and families of Stow-Glen Retirement Village in Stow, Ohio on becoming a 100% employee owned community of care on September 15, 2010.

Stow-Glen’s 250 employees offer skilled nursing, intermediate nursing, assisted living (5 levels of care), and independent living services to over 300 residents and also provide adult day care, home health care, STNA training & testing and catering services.  Their website has more news and information about their history, mission, and ESOP.

The Tribune Company ESOP

Today’s NY Times has an interesting (and long) article on the Tribune Co. since being bought by real estate mogul Sam Zell. In case you don’t know, Zell used an innovative (and some would say controversial and ill-advised) application of an Employee Stock Ownership Plan (ESOP) to help make the deal happen. Since the transaction, the company has declared bankruptcy, terminated it’s ESOP, and is currently mired in a number of pending lawsuits from creditors and employees alike.

At the time the deal went down, many in the ESOP world were concerned about the deal’s potential to harm the perception of ESOPs with the general public. In other words, it would join with the United Airlines employee ownership fiasco as the poster child for ESOPs gone wrong. Unfortunately, it appears that many of the fears have come true.

The reality is, though, that for every high profile ESOP disaster story, there are many positive stories of companies that have become more profitable and productive, and created and anchored jobs and wealth in our local communities.

Background info on the Tribune ESOP deal can be found in an article wrote by our very own Bill McIntyre in the Summer 2007 issue of our magazine Owners at Work.

Are ESOPs Good for Employee Owners?

In the course of doing some general internet research on employee ownership, I came across an interesting article from the March 29th issue of the Christian Science Monitor. The article explores the growth of employee-owned businesses in the U.S. One of the highlights from the article:

Not everyone’s sold on the idea. Norman Stein, a professor at the University of Alabama School of Law, objects to the generous tax benefits ESOPs receive. He also says they present too much risk to employees, who may “lose their jobs as well as their retirement savings in one stroke.”

Many ESOPs, however, offer 401(k)s rather than pensions, allowing employees to stash retirement funds in other companies. To Bob Graybill, president of FMS, an ESOP is a safer retirement plan in today’s economy than a 401(k): “You don’t have to put any of your own money into the [ESOP], and you’re in control of your own destiny, instead of throwing money into a public company that’s making decisions you have no control over.”

Unfortunately, the attitudes of Professor Stein are all too common among many business and law school professors and other employee ownership naysayers.

While Bob Graybill does a good job making the case for ESOPs, I would add the following comments:

  • All sorts of businesses receive all sorts of tax breaks for all sorts of reasons; why not for expanding business ownership and creating better companies?
  • While there is certainly an increased risk with being a business owner, there is also an increased chance of reward; I believe it’s called being an entrepreneur. Good employee-owned companies create companies full of entrepreneurs.

Employee Ownership is certainly not a pie-in-the-sky panacea for everything that ails our economy. However, when employee ownership is combined with the type of employee involvement and culture highlighted in the CSM article, studies have shown that the companies are more profitable, more productive, provide higher wages and benefits, and survive economic downturns better than their conventionally owned counterparts.

We should be encouraging more of them.