Most ESOP companies have a very open-book, high-involvement culture. They share a lot of information with employees about the company, and they set up structures for employees to get more involved in identifying problems and generating ideas.
Americans have largely taken for granted that businesses should be owned by their investors or founders. Some believe it is the best ownership system possible; others simply accept it as an inevitable consequence of capitalism.
Based on my involvement with a number of ESOP boards and my own experience as CEO and chairman of the board of OwnersEdge, a Wisconsin-based ESOP holding company with five affiliates, I’ve noticed an opportunity for more strategic board leadership.
ESOP distribution rules are a minefield, with problems just waiting to happen. The rules are complex. Plan sponsors are primarily concerned with the timely identification of those entitled to distribution, how much they get, and when they get it.
The plan document defines which employees may participate in the ESOP and which are excluded from participation. It defines the conditions for joining the ESOP. What can go wrong, especially if the plan sponsor hired a third-party administrator (TPA) to assist with determining who is eligible and the date eligible?
A common theme we hear from members is the difficulty of hiring and retaining great employees. At the NCEO Fall Forum in September, I had the opportunity to work with Jesse Tyler from Hypertherm on a workshop designed to address some of the challenges.
