Success Stories
Employee Ownership Benefits Everyone
August 30, 2024
Employee ownership isn't a buzzword or a trendy business model — it’s a fundamentally different approach to business that is a game-changer for everyone involved. Whether you’re an employee-owner, a customer, or part of the local community, employee ownership benefits you. Here’s how. Employee-Owners Benefit Employee-owners inherently have a stronger relationship with the company than workers at a conventional business. The nature of employee ownership shifts the dynamic between employees and their workplace, empowering and motivating workers while creating a people-first culture. 1. Wealth-Building The biggest benefit of employee ownership is the ability to build life-changing wealth. Our analysis of Federal Reserve data shows that if every American business were to become employee-owned, median household wealth would increase by over $100,000. Employee owners automatically benefit when their company does better, and they have the opportunity to build wealth outside of traditional retirement and investment accounts. 2. Ownership Culture When employees are financially invested in the growth of the business, they develop a sense of ownership, knowing they are part of something bigger. This direct link between effort and reward means they're more likely to be motivated and engaged at work. From daily decision-making to building relationships with team members to suggesting ideas for improvement, the ownership mindset influences every aspect of the job and leads to a culture of ownership. Customers Benefit Customers who work with employee-owned businesses stand to benefit from their positive culture. 1. Better service with trusted partners Good customer service is key to business success, and employee-owners have an incentive to ensure their company does well. Clients of employee-owned companies can naturally expect better customer service than they'd receive elsewhere. A vital component of the client-business relationship is trust. Employee-owned companies offer job stability and a favorable work environment, which leads to lower turnover. Customers benefit from strong relationships with people who are familiar with their needs and committed to providing good service for the long haul. 2. Dealing directly with an owner Dealing directly with employees who have a stake in the business can lead to more efficient decision-making. Employee owners are empowered to shape decisions, which means customers benefit from working with business partners who have more agency and autonomy. Non-Participant Employees Benefit Some workers at employee-owned companies may not directly participate in the employee-ownership model or aren't eligible yet. For example, some companies have a union that does not participate in an ESOP (Employee Stock Ownership Plan), preferring instead to be part of the union’s pension plan. Non-participants still see benefits from employee ownership. They might not own shares, but they are still part of the culture and will benefit from the positives such as stronger relationships, lower turnover, team members who care more about their work, and happier customers. And while they may not have the direct effort/reward relationship with the company that employee-owners do, non-participant workers still indirectly benefit when the company does well. The Community Benefits 1. Stable jobs Communities gain from having employers who provide stable jobs for local people. The job stability offered to employee-owners translates into a stronger and more resilient local economy. For example, during the COVID-19 pandemic employee-owned companies were 4x more likely to retain jobs. 2. Wealth stays local Employee-owned companies tend to have deep roots in their communities because employees are invested in them. They're less likely to make decisions that would have a negative economic impact on a community to achieve bottom lines, such as moving to a cheaper location. Research has also proven that the benefits of employee ownership also lead to better business outcomes. The result is stronger companies that are rooted in place, which creates robust local economies. Overall, employee ownership is a structure that benefits companies and allows the people who contributed to the business to share in its success. Whether you’re an employee-owner, a customer, part of the community, or someone seeking a job at an employee-owned company, there are clear benefits that make this approach to business a win-win for all.
Read More ▶The Simple Concept That Turns Employee-Owners Into Millionaires
March 10, 2023
Last month we looked at three inspiring stories of employee-owners building life-changing wealth. We saw how regular grants of company stock at companies like WinCo Foods and Springfield Remanufacturing Company helped front-line workers build eye-opening account balances, in some cases over a million dollars. These stories are incredible, and perhaps even sound too good to be true. But what if I told you that these employee-owners were able to build such large amounts of wealth by leveraging the same force that billionaires like Warren Buffet used to build their wealth? The magic behind employee ownership is the magic behind all great fortunes: compound growth. In this post we’re going to take a peek under the hood at the surprising power of compound growth including: Warren Buffet’s Journey to Twelve Figures What Exactly is Compound Growth? Compound Growth Helps Employee-Owners Build Wealth The Key Ingredient is Time You’re Only Successful if Your Company is Successful This article has two big takeaways for employee owners. First, the most important factor in building wealth with employee ownership is giving compound growth plenty of time to work. Second, the better your company does, the faster your wealth will grow. Even small improvements in company performance add up to big changes thanks to compounding. Warren Buffet’s Journey to Twelve Figures Compound growth is simple to understand but can be difficult to appreciate. Imagine if I proposed the following deal: today you hand me a dollar, and a year from now I’ll come back and give you that dollar along with two dimes. Would you do it? If you’re like most people, that deal doesn’t sound exciting. But that deal, executed repeatedly and at scale, is how Warren Buffet became one of the richest people in the world. If you don’t know about the “Oracle of Omaha,” Warren Buffett is a legendary value investor with a net worth of roughly $108 billion. Buffett built his wealth as the majority owner of Berkshire Hathaway, a holding company that he took over in 1965. According to publicly available shareholder letters, over the next 50 years, Berkshire Hathaway’s stock grew at a compound growth rate of 21.6% a year. To put it another way, a single dollar invested alongside Buffett would have grown to $18,262 (source: Berkshire Hathaway Letters to Shareholders). That’s the power of compound growth. What Exactly is Compound Growth? In terms of investing, compound growth is when invested money earns returns on both the original amount as well any accumulated growth. Here’s a simple example. Say you invest $2,000 and earn a return of 10% per year. In the first year, you'll earn $200, bringing your total to $2,200. In the second year, you'll earn returns on the full $2,200, which comes out to $220. This includes $200 of growth from the initial $2,000 investment plus $20 from the $200 of growth from the first year. That $20, the growth made solely from prior growth, is your first bit of compounding. Compound growth means your money is growing at an accelerating rate. This effect starts small, but it becomes more and more powerful with time. Compound Growth Helps Employee-Owners Build Wealth Employee-owners tap into compound growth by owning shares of company stock. Their stock has a value determined by their company’s share price, which changes each year based on the value of the business. If the company’s share price goes up over multiple years, then the value of the stock grows with compound growth. While practices vary, most employee-owners receive an allocation of company stock each year paid for out of company profits. Annual allocations supercharge an employee-owners growth by building the account value in the early years while compound growth is still picking up steam. Building on the example above, say an employee-owner receives an allocation of $2,000 of stock at the end of each year and their company’s share price grows at 10% annually. Here’s how their account balance would grow initially: Our employee-owner sees $200 of share price growth in year 2 and their first compound growth in year 3. After 5 years of ownership, allocations add up to $10,000, over 80% of the total account value. In general allocations make up the bulk of an employee-owner’s account value early on, but that changes dramatically with time. The Key Ingredient is Time Let’s check in on that same employee-owner after compound growth has had time to work its magic. Let’s assume the allocations continue at $2,000 a year and the share price continues to grow at 10% annually: The first thing to notice is that our employee-owner’s total account value is accelerating. After 20 years they have over $110,000 in their account. After 25 years, they’re almost at $200,000. And after 30 years, they’re over $320,000! This acceleration is the tell-tale sign of compound growth. This example also shows how compound growth ends up driving most of the wealth building. Allocations continue, but they become less and less important as compound growth ramps up. By the end of their career, our employee-owner has accrued over 80% of their total account value from share price growth, exactly the reverse of what we saw after the first 5 years! You’re Only Successful if Your Company is Successful We started out talking about employee-owners becoming millionaires, but so far the highest account value we’ve shown is under $350k. This is where the share price growth rate factors in. After time as an owner, the next most important factor for employee-owners looking to build wealth is the success of their company. In general, the more successful a company is, the faster its share price will grow. To demonstrate the importance of company success, let’s look at how our employee-owner’s account value after 30 years changes with the rate of share price increase: For context, a 10% average annual share price is roughly what the public stock markets have returned over time. But it’s certainly possible for a successful private company to outperform this benchmark. Increased company success has a dramatic effect on our employee-owner’s account balance. Roughly speaking, a 1% annual increase in the company share price leads to changes in final account value of between $100,000 to $200,000. That’s huge! One very important caveat to all this is that no company’s share price is guaranteed to go up, and it’s possible that a series of events could lead to any company going bankrupt, which would make those company’s shares worth zero. For employee-owners, this risk is offset by the common practice that shares are paid for out of company profits, with the employee-owners not putting in any of their own money. And of course no financial gain comes without risk. What does it take for our employee-owner to become a millionaire? If their company is able to achieve a 20% rate of return over 30 years, they would retire with well over $2 million. Not every company will accomplish this, but it’s not without precedent. WinCo Foods managed to grow at roughly this rate from 1986 to 2014, a 28-year period. The minimum required performance for our employee-owner to see a seven-figure account balance is 16% annual share price growth over 30 years. Make no mistake, that is a solid performance that not every company can accomplish. But I personally have spoken to multiple employee-owned companies that have turned in this record, or better. Ultimately it comes down to how the company performs, which is something that every single employee-owner can impact through their ideas and their effort. Connecting the success of the company and the success of the employee through wealth building is perhaps the biggest reason we see employee ownership as a win-win for business and people. Note: The examples provided in this article are solely for illustrative purposes only and should not be relied upon in any way, nor should be construed as an appraisal, legal, financial, tax, or other professional advice. This article was originally posted on 3/10/23 and was updated on 7/11/23 to update the discussion of “compound interest” to “compound growth” which more accurately describes wealth building at stock-based employee-owned companies. What Exactly is Compound Interest? Compound Interest Helps Employee-Owners Build Wealth The Key Ingredient is Time You’re Only Successful if Your Company is Successful This article has two big takeaways for employee owners. First, the most important factor in building wealth with employee ownership is giving compound interest plenty of time to work. Second, the better your company does, the faster your wealth will grow. Even small improvements in company performance add up to big changes thanks to compounding. Warren Buffet’s Journey to Twelve Figures Compound interest is simple to understand but can be difficult to appreciate. Imagine if I proposed the following deal: today you hand me a dollar, and a year from now I’ll come back and give you that dollar along with two dimes. Would you do it? If you’re like most people, that deal doesn’t sound exciting. But that deal, executed repeatedly and at scale, is how Warren Buffet became one of the richest people in the world. If you don’t know about the “Oracle of Omaha,” Warren Buffett is a legendary value investor with a net worth of roughly $108 billion. Buffett built his wealth as the majority owner of Berkshire Hathaway, a holding company that he took over in 1965. According to publicly available shareholder letters, over the next 50 years, Berkshire Hathaway’s stock grew at a compound growth rate of 21.6% a year. To put it another way, a single dollar invested alongside Buffett would have grown to $18,262 (source: Berkshire Hathaway Letters to Shareholders). That’s the power of compound interest. What Exactly is Compound Interest? Compound interest is when invested money earns interest on both the original amount as well as the interest already earned. Here’s a simple example. Say you invest $2,000 at an interest rate of 10% per year. In the first year, you'll earn $200 in interest, bringing your total to $2,200. In the second year, you'll earn interest on the full $2,200, which comes out to $220. This includes $200 of growth from the initial $2,000 investment plus $20 from the $200 of growth from the first year. That $20, the growth made solely from prior growth, is your first bit of compound interest. Compound interest means your money is growing at an accelerating rate. This effect starts small, but it becomes more and more powerful with time. Compound Interest Helps Employee-Owners Build Wealth Employee-owners tap into compound interest by owning shares of company stock. Their stock has a value determined by their company’s share price, which changes each year based on the value of the business. If the company’s share price goes up over multiple years, then the value of the stock grows with compound interest. While practices vary, most employee-owners receive an allocation of company stock each year paid for out of company profits. Annual allocations supercharge an employee-owners growth by building the account value in the early years while compound interest is still picking up steam. Building on the example above, say an employee-owner receives an allocation of $2,000 of stock at the end of each year and their company’s share price grows at 10% annually. Here’s how their account balance would grow initially: Our employee-owner sees $200 of share price growth in year 2 and their first compound interest in year 3. After 5 years of ownership, allocations add up to $10,000, over 80% of the total account value. In general allocations make up the bulk of an employee-owner’s account value early on, but that changes dramatically with time. The Key Ingredient is Time Let’s check in on that same employee-owner after compound interest has had time to work its magic. Let’s assume the allocations continue at $2,000 a year and the share price continues to grow at 10% annually: The first thing to notice is that our employee-owner’s total account value is accelerating. After 20 years they have over $110,000 in their account. After 25 years, they’re almost at $200,000. And after 30 years, they’re over $320,000! This acceleration is the tell-tale sign of compound growth. This example also shows how compound interest ends up driving most of the wealth building. Allocations continue, but they become less and less important as compound interest ramps up. By the end of their career, our employee-owner has accrued over 80% of their total account value from share price growth, exactly the reverse of what we saw after the first 5 years! You’re Only Successful if Your Company is Successful We started out talking about employee-owners becoming millionaires, but so far the highest account value we’ve shown is under $350k. This is where the share price growth rate factors in. After time as an owner, the next most important factor for employee-owners looking to build wealth is the success of their company. In general, the more successful a company is, the faster its share price will grow. To demonstrate the importance of company success, let’s look at how our employee-owner’s account value after 30 years changes with the rate of share price increase: For context, a 10% average annual share price is roughly what the public stock markets have returned over time. But it’s certainly possible for a successful private company to outperform this benchmark. Increased company success has a dramatic effect on our employee-owner’s account balance. Roughly speaking, a 1% annual increase in the company share price leads to changes in final account value of between $100,000 to $200,000. That’s huge! One very important caveat to all this is that no company’s share price is guaranteed to go up, and it’s possible that a series of events could lead to any company going bankrupt, which would make those company’s shares worth zero. For employee-owners, this risk is offset by the common practice that shares are paid for out of company profits, with the employee-owners not putting in any of their own money. And of course no financial gain comes without risk. What does it take for our employee-owner to become a millionaire? If their company is able to achieve a 20% rate of return over 30 years, they would retire with well over $2 million. Not every company will accomplish this, but it’s not without precedent. WinCo Foods managed to grow at roughly this rate from 1986 to 2014, a 28-year period. The minimum required performance for our employee-owner to see a seven-figure account balance is 16% annual share price growth over 30 years. Make no mistake, that is a solid performance that not every company can accomplish. But I personally have spoken to multiple employee-owned companies that have turned in this record, or better. Ultimately it comes down to how the company performs, which is something that every single employee-owner can impact through their ideas and their effort. Connecting the success of the company and the success of the employee through wealth building is perhaps the biggest reason we see employee ownership as a win-win for business and people. Note: The examples provided in this article are solely for illustrative purposes only and should not be relied upon in any way, nor should be construed as an appraisal, legal, financial, tax, or other professional advice.
Read More ▶Three Inspiring Examples of Employee-Owners Building Life-Changing Wealth
January 20, 2023
There’s a lot to like about employee ownership. By changing the relationship between the company and employee, broad-based ownership creates alignment up and down a business. Engagement is stronger, people are more motivated, relationships are more durable, and companies are more successful. But of all the positive aspects of employee ownership, the most inspiring is how it can build life-changing wealth for employee-owners. Wealth building for working people ties the employee ownership community together. Every employee ownership structure, including Employee Stock Ownership Plans (ESOPs), Worker Cooperatives, Employee Ownership Trusts (EOTs), and Direct Share Ownership, builds broad-based wealth through some combination of capital accounts and profit sharing. It was the common thread in over 250 conversations about the meaning of employee ownership we had when we set our certification standards. And while there are decades of research in support of this model, it’s the individual stories of wealth-building that inspire people to join the employee ownership movement. In this article we will touch on three inspiring examples of employee-owners building life-changing wealth. We also consider the question of scale: are these examples cherries we have picked or would a wide-spread transition to employee ownership change millions of lives? WinCo Foods WinCo Foods was founded in 1967 by Ralph Ward and Bud Williams. The no-frills, warehouse-style grocery store focused on low prices soon grew from the original location into a small chain in the Pacific Northwest. In 1985, after the passing of Mr. Ward, the company transitioned to employee ownership. Several decades of success later, the company now has over 20,000 employee-owners across 135 stores in 10 states. Broad-based ownership translated WinCo’s growth into impressive wealth-building for employee-owners. In 2014, the 130 workers at a single store in Corvallis, Oregon had a combined $100 million in ownership wealth and across the company over 400 front-line employees were “millionaire grocery clerks”. According to the most recent Department of Labor 5500s, in 2020 WinCo’s employee-owners had a combined $3.6 billion in company stock. Cathy Burch’s story illustrates the impact of WinCo’s employee ownership. Cathy joined WinCo in 1991 and worked a number of front-line jobs such as stocking shelves, doing checkout, and ordering inventory. Over the years she received small allocations of company stock and benefited from compound interest as WinCo’s share price grew at roughly 20% a year. Ownership helped Cathy build a level of wealth and security that is unimaginable for most in her position. “I have almost $1 million in stock”, she said when interviewed for Forbes in 2014, “If I wanted to, I could retire right now.” Springfield Remanufacturing Company Springfield Remanufacturing Company (SRC) is another iconic example of employee ownership building broad-based wealth. Founded in 1983 as a distressed spin-out from International Harvester, SRC’s unique approach to open-book management was born of necessity. With an 89:1 debt to equity ratio and an interest rate of 18%, the new company had to find a way to get every single employee thinking about how to save every possible dollar. The laser focus created by approaching business as a team sport not only helped SRC pay off it’s initial loan and led to a leading opening-book management system known as The Great Game of Business, but it created a lasting culture that has continued to drive SRC’s growth. Today the company has 10 divisions with over 2,000 employee-owners. SRC’s approach to employee ownership rests on thinking like an owner but also benefiting like one. The company has been 100% employee-owned from the very beginning, allowing employees like Rick Hedden to own a piece of the action. The shares Rick earned over 36 years as an employee-owner allowed him to retire early at 59 to focus on his hobbies and his family. “I wanted to be able to retire while I was healthy and I could afford it,” Rick said when interviewed for an article on the Great Game of Business Blog, “my wife and I are also enjoying having more time with each other without any pressure or timelines.” Rick is not alone. Employee ownership has helped transform SRC from a struggling spinout with a share price of 10 cents into a thriving conglomerate with a share price of over 420 dollars. Along the way, SRC has paid out over $100 million to retiring employee-owners and created 30 millionaires. New Belgium Brewing New Belgium Brewing offers a different perspective on how employee ownership can help build life-changing wealth. Founded in 1991, the Colorado-based brewer helped popularize craft beer with it’s flagship Fat Tire Ale. New Belgium transitioned part of the business to employee ownership in 2000 and then went to 100% in 2013. Unlike WinCo and SRC, New Belgium is no longer employee-owned. The company was sold to Little Lion World Beverages in 2019. How can a company that’s no longer employee-owned be an inspiring story? In an interview with Forbes, Katie Wallace, the Director of Social and Environmental Impact, shared, “ultimately, the sale was a great success story for employee ownership in that more than 300 New Belgium coworkers will receive more than $100,000 in retirement money, with some coworkers receiving quite a bit more. Over $190 million will have been paid out to hundreds of families by the time the deal closes. This is money that founders of a more traditional business could have easily pocketed themselves, so it’s an excellent win for wealth equality.” New Belgium shows that employee ownership not only creates tremendous upside, but it also creates downside protection in the case of a sale. While it’s bittersweet to see a company transition out of employee ownership, sales are a fact of business ownership and there will always be times where the best outcome for the owners is to sell. In the case of New Belgium, the sale was put in front of the employee-owners and a majority voted in favor of the deal. Does Employee Ownership Scale? WinCo, SRC, and New Belgium show how employee ownership helps workers share in the value they create and access that value in the case of a sale. But perhaps these three exceptional companies are not representative of the broader employee ownership experience. To understand the economy-wide impact of a transition to employee ownership, Certified EO teamed up with Professor Ethan Rouen at Harvard Business School to answer a simple question: what would happen if every company in America employee-owned? Analyzing data from the Federal Reserve, we demonstrated that an employee-owned economy would be an absolute game-changer. Median household wealth would rise from $121,760 to $230,076 and wealth inequality would drop to historic lows. Our analysis shows that the inspiring stories we highlighted are certainly great outcomes, but if every company in America were employee-owned, they would be common. Today these stories are a light that can guide us as we seek to change more lives through employee ownership.
Read More ▶How Exits Impact Employee-Owners: an Interview With Michelle Waterhouse of Hopkins Printing
August 11, 2022
The common thread that connects all corners of the employee ownership community is wealth building for working people. Broad-based ownership gives every employee the opportunity to earn the benefits of business ownership, namely access to profit sharing and shares of company stock. Shares in particular represent a major opportunity because they can grow exponentially through compounding. To utilize the wealth they have built, employee-owners must eventually turn their shares into cash. That typically happens in one of two ways. At companies that are operating as employee-owned in perpetuity, the company will buy shares back from employees when they leave or retire. But if an employee-owned company ever decides to sell, employee shares are purchased as part of the acquisition. While the sale means one less employee-owned business, it also means access to potentially life-changing wealth for the employee-owners. To highlight the dynamics involved in the sale of an employee-owned business, we connected with Michelle Waterhouse, the HR Director of Hopkins Printing, an employee-owned company that was sold January 31, 2022 after nearly 15 years as an ESOP. TD: Thank you for taking the time to share your story with us. Why don’t we start with a bit of background on the company.MW: Hopkins Printing started in the garage of Jim and Arnie Hopkins in the mid 1970’s. They opened a copy center in downtown Columbus and then moved into color printing in the 80’s. From there they grew to their current location with a 100,000 square foot facility, operating 3 shifts with 100 employees. TD: How & when did you get involved in the company?MW: My parents are Jim and Arnie Hopkins, so I have worked at the company since I was a teenager. After graduating college in 1990, I took an office role. As our employee count kept growing, I moved more into an HR role. I also brought back a new husband from college, Roy Waterhouse. He and my dad got along well and he has been here 32 years as well. Roy was the president and CEO before the sale, focusing on sales and marketing.TD: And when did you first consider employee ownership? MW: In 2007 we had entered into an LOI with a publicly traded printing company. We soon figured out that it would not be a good fit for our employees. My father Jim had already heard of ESOPs and saw it as a way to reward the employees who had helped build the company from the early days. So we reached out to a well-known ESOP attorney here in Columbus to learn more about what it would mean for our company and our employees. TD: How did becoming employee-owned impact your business?MW: Looking back, I would say the most notable impact was employee retention. Employees realized that they had skin in the game here. This was a stock that they owned and they could help impact the share price every year. Low turnover is very good for a business in terms of employee knowledge and the cost of training new employees. TD: When did you first start thinking about a sale?MW: We were approached in May of 2021 by a company that owns another very large printing company in the United States because they wanted to get into the type of commercial work that Hopkins Printing does. Our first concern was: what will this mean for our employees? We asked to see their employee handbook and their benefit package. I’m sure this was different than any other merger in their history because we wanted to talk about employees before we talked about money. We were pleasantly surprised that their handbook was very similar to ours and they provided more PTO than we did. And their benefits were much better than we were able to provide for our employees. After we learned these two things, we started moving forward with the process. TD: What was the consideration process like?MW: It was a good process. We spent 5 months working out the details with the new company before we announced anything to the employees. Both sides spent those 5 months exchanging information to make sure it was going to be a good fit. Our ESOP Trustee and ESOP attorneys helped bridge the gap and helped us navigate all the considerations needed to sell an ESOP company. In November we called an all-employee meeting on a Tuesday afternoon. Our president explained to everyone about the call he received in May and he also explained a little about the company that was buying us and what they were looking for. Our founder, who was 81 at the time, told the employees why he thought it was a good idea. He explained how it’s hard to be a small business right now with everyone trying to recover from the impact of the pandemic, all of the regulations, rising health care costs, and so on. He explained that the next generation of leadership is in their 50’s and will be able to continue and help make it a smooth transition. As HR Director, I shared that the new company’s CEO told us that all employees would keep their jobs and that I had been tasked with hiring 25 additional employees to help with the increased work they planned on sending to our plant. I also explained the main perks of their benefit package. Our COO then explained what it would mean for their ESOP accounts and that they would all have a vote in this transaction. If they all decided that they didn’t want to sell the company, we would continue being an ESOP and being in business together doing great things. If we did sell the company, all shareholders would receive 95% of their share value around 90 days after the transaction closed at a premium over our most recent share price that was calculated as of 12/31/2020. We then handed every employee a 16 page document that detailed the financial aspects of the sale and their ESOP accounts. All shareholders had one week to research the new company and ask us any questions. We then had a follow up meeting with all employees and our Trustee to answer any questions. They all then had one week to send their vote to our Trustee. We have 30,000 shares and the vote was 29,922 yes and 78 no. TD: How has the sale impacted your people and your company? MW: Many employees owned stock worth hundreds of thousands of dollars. Our concern was that they would get their money and quit their jobs, so we spent the next few months coaching about saving, investing, tax penalties for taking it out early, etc. We brought in our 401k advisor as an option for employees to be able to talk with someone they have known for years. Everyone was finding financial advisors and planning for this large influx of money. Shareholders received 95% of their account value as a distribution in mid-May. They will receive the remaining amount due after the company has closed out all financial issues and collects the 5% holdback from the sale. We were very happy that no one quit their job! Most everyone saw it as an opportunity to set their retirement up and transferred the money to another retirement vehicle to avoid taxes and penalties. Some of our employees had debts that had been hanging over their heads for years, or wanted to pay off credit cards, their car, or their house. Those employees took out some of the money to set themselves up better financially in the present, and then moved the rest aside for a more comfortable retirement. Because we were such a strong company here in our city, the new company kept our name, so we are still Hopkins Printing. They have been sending us work for our plant and their benefits have been amazing. In addition, their support with HR, IT, production, supplies, and safety, to name a few, has been a big help to us as a small company. It’s fun being part of a growing, large company. The key to this sale was that we didn’t need to sell and we took the time to make sure it was win-win-win. It really did work out well for our ESOP, for the new company, and for everyone’s future. The above questions and answers were exchanged via email in July 2022. Some answers have been edited for clarity and brevity.
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