Employee Ownership Gives Employees Greater Stake in Business
WASHINGTON – Today, the House Committee on Small Business heard from business owners and experts on the benefits of employee ownership.
“One form of employee ownership is an employee stock ownership plan, or an ESOP for short. A company that is organized as an ESOP provides its employees with the ability to obtain ownership shares through a qualified defined contribution plan,” said Ranking Member Steve Chabot (R-OH). “While our nation struggles with saving for retirement, research shows that ESOPs provide important retirement resources and options for employees across the board.”
ESOPs Provide Benefits to Employees, Economy
“When I began working at Messer Construction it was a Cincinnati based, medium size, family-owned construction company with a long history and a good reputation… In 1988 the last son of the company founder died and we found ourselves with an uncertain future. The grandchildren of the founder wanted access to their wealth and, having no connection with the employees, were not committed to maintaining employment at the company. In 1990 the Messer employees were able to buy their future from the Messer family, using the ESOP structure,” said Mr. Mark Gillming, Senior Vice President, Messer Construction Co., in Cincinnati, OH. “The opportunity to become an employee owner has helped Messer Construction recruit and retain millennial workers in a tight labor market. These individuals share the vision of working as an owner and not just an employee and embrace the challenges and opportunities that come with being an employee owner.”
“Sumner, Iowa has a population of 1,961 and has one major private employer. Life Line Emergency Vehicles designs and builds ambulances and other emergency vehicles for first responders. It provides 180 good paying jobs,” said Mr. Daniel Goldstein, President and CEO, Folience, in Cedar Rapids, IA. “In 2010 the founder and controlling owner passed away, leaving leadership of Life Line and its ownership to his 69-year-old widow who had not worked in the company. When I met her in 2016, she was 75, CEO and President, and had no children or heirs prepared to take over the business. The business had to be sold… Folience gave them another option… Folience’s ESOP purchased Life Line, and as those 180 employees vested in the ESOP through their work, they became owners of Life Line.”