Top Small Workplaces: ESOPs and Employee Ownership

I would like to thank Mark Harbeke at Winning Workplaces for the link in Friday Nugget: 15 More Blogs for Small Business and Entrepreneurship. Winning Workplaces and The Wall Street Journal recently collaborated to determine the 2008 Top Small Workplaces. Here are some of the ESOP and employee ownership comments about the 2008 Top Small Workplaces:

ATA Engineering Inc.

In 2004, the 28 employees from the former firm agreed to make the company 100% employee-owned by starting an employee stock-ownership plan. What's more, every ATA engineer, manager and executive is paid on the same engineering pay scale -- there's not a separate scale for managers. So there aren't big differences in pay between managers and the people they supervise….Part of ATA's flat, ownership culture also means allowing employees to make important decisions without needing massive amounts of approval, as well as allowing all engineers to lead projects at various points. So, even senior managers could end up working under one of the people who report to them.

Jackson's Hardware Inc.

In the late 1980s, founder H.C. Jackson decided to sell the business to his employees, who now own 100% of the company through an employee stock-ownership plan. As part of creating an ownership culture, Jackson's spends ample time teaching employees about the benefits of ownership, says President and Chief Executive Bill Loskutoff.

The company has a committee whose role is to educate employees about stock ownership and how their work is directly related to the success of the business -- and thus their own financial well-being. Jackson's also puts out an annual ownership-plan newsletter and selects an "Employee Owner for the Month" who receives a gas card and $600 toward a weekend getaway and dinner or store purchase.

Each year, the company makes a contribution to the ownership plan based on company profits; the average annual contribution since 1997 has been about 20% of employees' total wages. On top of the stock plan, the company pays 100% of the health-insurance premiums for employees and their dependents -- a rarity in the retail business.

King Arthur Flour Co.

The 218-year-old company, started in Boston, was family owned for five generations. But starting in the mid-1990s, the family began selling shares to an employee stock-ownership plan, and today the company is 100% owned by workers.

Company executives believe that teaching its employee owners about baking and baking culture will give them an enthusiasm that will spill into how they perform their jobs and deal with customers. Even employees who don't work directly with flour are encouraged to learn about baking. "It just helps bring home what we're doing as a company," says Chief Executive Steve Voigt, who started at King Arthur in 1992 as vice president of finance.

New Belgium Brewing Co.

Ms. Jordan says employee ownership has also helped boost engagement. Employees own about 32% of New Belgium through a stock-ownership plan, and the company practices open-book management, hosting monthly meetings where it walks employees through the company's financial statements.

Paducah Bank & Trust Co.

Senior management at the five-branch bank considers internal development a way to keep the best and the brightest around so they don't migrate to other banks or careers. It's also a good way to instill an ownership mentality among employees -- who own 23% of Paducah through a stock-ownership plan -- and teach them how a bank functions….Paducah also tries to maintain a familylike ownership culture by holding a short "Owners' Meeting" every morning in each department at each location. At the meetings, they discuss bank events and how to improve customer service, and celebrate employee birthdays and other milestones.