Scott Forge Thrives as ESOP Company

Scot Forge in Spring Grove, IL, is one of the oldest ESOPs, with a plan dating back to 1978. The metal forging company was founded in 1893 and sold to an ESOP when the then-current owner decided to use the plan as a means to provide a market for his shares. The ESOP acquired the shares gradually over a period of 11 years and now owns 100% of the company. Employees have full voting rights and representation on the company's board. Monthly luncheons provide an opportunity to review the company's financial performance. Employees get dividends on their shares and bonuses paid out three times a year. Since the ESOP was established, stock value has gone up 16.7% per year. In 1997, the company had average sales of $317,000 per worker compared to $150,000 for the industry overall.