ESOP beneficial if good fit with company goals

by Christine Ballew-Gonzales

SBJ Contributing Writer

Employee stock ownership programs are a company ownership option being considered with greater frequency in recent years. But the process of deciding to go with an ESOP, as well as the task of setting one up, can be complex.

Anderson Engineering Inc. was in the midst of an impending ownership change when the possibility of choosing an ESOP entered the picture, according to Steven Brady, president.

"Another company wanted to buy this company," he said. "The employees wanted to look at other options."

Once the decision was made, financing was secured, and an attorney set up the program, Brady said. Establishing the ESOP took about a year and a half. Getting the right professionals involved makes all the difference, he added.

"It's important to find an attorney experienced in setting up ESOPs, and it's also important to find a good bank to work with," he said.

Educating the employees about their ESOP was the next step, and newsletters and employee meetings were used to keep Anderson's staff informed. The engineering firm's ESOP is now a little more than a year old.

"They're excited about it," Brady said of employee response to the program. "They're excited about getting part ownership in the company, and the employees feel more that the company is part theirs. It's been reflected in their pride in their work, and their interest in how the company is doing. It's all been positive."

Dick Jackson, president and chief executive officer of Barker Phillips Jackson, has had an ESOP in place since his company, Consolidated Jackson Corporation, merged with Barker Phillips in 1986.

"When we merged companies, we merged our profit sharing plans, then rolled them over into an ESOP," he said. "We now have 87 percent of the company owned by the employees[[In-content Ad]]