Truck Parts and Service | Heavy Duty Trucking, Aftermarket, Service Info
Issue link: http://read.dmtmag.com/i/795141
program for everyone within their operation. Done well, an ESOP "can be a win- win scenario for both employees and employers," writes Wells Fargo in its white paper A look at the good, the bad, and the ugly of an Employee Stock Owner- ship Plan. ESOPs have existed in North Ameri- can business for more than a century. Early ESOPs sold small fractions of a company to employees as retirement earnings programs but allowed original ownership groups to maintain a signifi - cant controlling share of an operation. It wasn't until the mid-20th century that the tactic began taking hold as an option in succession planning and a true company-wide ownership program. Today the ESOP Association — an independent organization supporting the ESOP industry — estimates 40 percent of America's 10,000 ESOPs are solely owned by their employees, while more than 5,000 are at least majority employee owned. The businesses are wildly successful, too. A recent ESOP Association survey dis- covered the average yearly contribution its members contributed to their ESOPs, as a percentage of covered compensa- tion, was nearly 12 percent. The busi- nesses also reported improved informa- tion sharing, communication, decision making, motivation and productivity increases after becoming an ESOP. Giving employees stock in their employer gives them something to work toward. When everyone is invested, everyone gets to reap the rewards, says Joe Bazzano, owner and COO at Beacon Exit Planning. "[ESOPs] typically have a different culture than most businesses in that they tend to be more open and professional," he says. "Employees know if they work hard they're going to get an added perk in addition to just their salary." Greg Klein says Inland Truck Parts has been enjoying this employee com- mitment for decades. The distribu- tor was one of the fi rst ESOPs in the independent aftermarket when its original owners sold the business to its employees in 1982. In the years since, Inland has enjoyed progressively steady growth, and now has 650 employee 15 W W W . T R U C K P A R T S A N D S E R V I C E . C O M M a r c h 2 0 1 7 | T R U C K P A R T S & S E R V I C E The enticing advantages of employee ownership as a succession plan Cover Story [An Employee Stock Ownership Plan] can be a win-win scenario for both employees and employers. – Wells Fargo A look at the good, the bad, and the ugly of an Employee Stock Ownership Plan