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Ownership and developing the leadership," said McFadden. The past four years have been challenging ones for ICM of America, but McFadden is confident that within five years the ESOP will be expanded. Do ESOPs Perform Better? Intuitively, many businesses buy into the idea that employeeowners outperform their counterparts at nonemployeeowned companies. And researchers have provided some evidence that they do perform better. A 2012 paper published by the National Bureau of Economic Research concluded that "shared capitalist forms of pay are associated with high-trust supervision, participation in decisions, information sharing, and with a variety of positive perceptions of company culture. At the firm level, shared reward forms of pay are associated with lower voluntary turnover and higher return on equity (ROE). But it is the interaction between the mode of compensation and work practices and workplace culture that dominates the impact of shared capitalist pay on turnover and ROE. "Shared capitalism" is the researcher's term for ESOPs. The researchers examined data from companies that applied to Fortune magazine's list of the "100 Best Companies to Work for in America" from 2006 to 2008, and it covers more than 300,000 employee surveys from all 1,300 corporations that applied. Douglas Kruse and Joseph Blasi of Rutgers also found that ESOPs appear to increase sales, employment, and sales per employee by about 2.3 to 2.4 percent per year over what would have been expected absent an ESOP. In this study, they obtained files from Dun and Bradstreet on ESOP companies that had adopted plans between 1988 and 1994. They then matched these companies to non-ESOP companies that were comparable in size, industry, and region. Of course, an ESOP is no guarantee of success. Difficulties can bring down any business regardless of ownership. When someone's blood, sweat and tears go into a business, it's understandable for them to want to see it continue – to grow and to prosper. However, at the same time, owners have a very real need to pull out some of the equity from the business. If it's true that more and more family-owned businesses are having difficulty finding successors, you may be seeing more ESOPs in the future. n Joanne Costin is a freelance writer and marketing consultant focusing on the construction industry. She can be reached at (847) 358-1413 or jcostin@costincustom.com. FOLLOW YOUR FLEET NEARLY EVERYWHERE – NO MATTER WHERE YOU ARE Boost fleet efficiency with Verizon Networkfleet.® This GPS-based telematics solution can help you: • • • • Improve Route Planning Increase Productivity Enhance Safety Control Maintenance Costs Drive business results up – and expenses down – with our award-winning, easy-to-use technology. Learn more at networkfleet.com ©2013 Verizon. All Rights Reserved. AD-N006 - 08/15/13 October 2013 | Construction Equipment Distribution | www.cedmag.com | 39 36_ESOP_Feature_KP.indd 39 9/26/13 3:30 PM