I first learned about ESOPs in the 1990s after reading The Great Game of Business by Jack Stack. Since then, I’ve been fascinated with these unique benefit plans that can lead to tremendous wealth generation for the employee participants of these plans. Yet, some 25 years later, I still find myself continually learning new things about ESOPs. I’m also puzzled by the lack of awareness regarding the ‘what’ and ‘why’ of ESOPs.
Who is Jess Helvik?
Jess was talking about ESOPs in general and fielding questions from employees. Jess was so clear and compelling that I was taking notes as fast as I could. The following day, I was knocking at his cyberspace door for an interview.
- ESOP fundamentals
- What is the simplest definition?
- Why is there still an awareness issue with ESOPs?
- Why do owners consider the ESOP journey?
- Who are ESOPs for?
- Are small companies shoutout?
- The 3 (potential) myths surrounding ESOPs
- Is it a benefit plan?
- Do owners lose control of their business when selling to an ESOP?
- Activities before, during, and after an ESOP comes to life
After visiting with Jess, I thought of several questions for a homework assignment. Here’s the gig – find a CEO who has gone through the ESOP journey. I’d suggest finding the CEO behind an ESOP that is at least five years old. When you find that leader, ask them these five questions. Don’t worry, they will be happy to respond.
- Would you go through this process again?
- Did you get what you wanted in terms of price?
- Have you lost any control in the business if you remained in the CEO role? Also, is the leadership as good or better in the company?
- Have you noticed an increased administrative burden as a result of the ESOP?
- What has been the average contribution to the ESOP as a percentage of all payroll dollars?
Your Next Listen
If you liked the conversation with Jess Helvik, I recommend our conversation with Greg Graves, the former CEO of the employee-owned engineering firm, Burns & McDonnell. He’s also the author of Create Amazing.
I also recommend the interview we did with board members of PFSbrands (mentioned earlier) where we do deep dives on open book, team loyalty and dedication, employee financial training, and ESOPs. The founder and Chairman of the Board is Shawn Burcham, author of Keeping Score with Gritt.