FORT KENT, Maine — After 60 years as a private, family-owned business, Daigle Oil Co. this week announced its ownership is now entirely in the hands of its 182 employees.
According to company officials, Daigle Oil is now 100 percent employee owned thanks to an employee stock ownership plan — or ESOP — that allowed vested employees to buy into the company.
“Our company has been locally owned and closely held for 60 years and is a reason why we have such loyal customers,” CEO Rick Daigle said in announcing the move earlier this week. “We believe providing ownership as a company benefit will increase dedication to the company, improve work effort, reduce turnover and lead to a culture of leadership and responsibility. This also adds value to our customers, who we look to continue to serve.”
Daigle, whose father, Guy Daigle, founded the company in 1955 with one fuel truck in Fort Kent, said the ESOP will not change company operations and that both he and COO Dan Vaillancourt plan to remain on board for awhile.
According to brand manager Sonya LeBoeuf, the move to an ESOP has been in the works for a couple of years and was aimed largely at securing the company’s future as a community-based business.
“The employees and their welfare and the welfare of the company were in true consideration when this was being researched,” LeBouef said. “This is really a retirement plan for [Rick Daigle] and [Dan Vaillancourt] and a succession plan for the company and a retirement plan for the employees.”
Companies that want to follow the ESOP model must set up an employee stock ownership trust. After a period of vestment, or waiting, owner-employees are distributed shares annually. The value of those shares has to be set by an independent entity.
Under the plan, all eligible employees will earn a yearly allocation based on their percentage of eligible compensation.
The ESOP is a qualified retirement plan and operates according to federal Employee Retirement Income Security Act guidelines.
Daigle Oil employees already were participating in a 401(k) retirement plan and may continue to do so, LeBouef said.
ESOPs can be a “job preserver,” according to Michael Keeling, president of the ESOP Association, a national advocacy group for employee-owned companies. “Nearly all ESOPs in the 21st century are part and parcel of [a company’s] succession plan.”
It often comes down to what is in a company owner’s heart and mind, Keeling said.
“I have heard people say when they are looking at their workforce that [the workers] were the ones who followed them and they [built the company] together,” Keeling said. “These owners do not want to leave the future for those workers uncertain.”
In the case of Daigle Oil, securing an outside buyer to take over once he retired was an option for Daigle, but one he believed was not in his employee’s best interests, or the long-term health of his company.
“If we didn’t have implicit trust in our employees, this deal would not have taken place,” he said. “The establishment of the ESOP itself is a testament to our sincere concern of the welfare of our employees and to the economy of the region.”
More than 30 companies in Maine have joined the employee stock ownership plan model, including firms as large and well-known as Pittsfield-based Cianbro, Johnny’s Selected Seeds of Winslow, Dennis Paper & Food Service in Hampden and Stillwater-based Sargent Corp.
Daigle would not comment on the sale price involved in the ESOP — Daigle Oil is a privately held company — and would only say the annual payroll is “several million dollars.”
Jonathan Michaud, Daigle Oil service department administrator, said this week he is excited about the ESOP move.
“I think it’s a really neat thing to be a part of,” he said. “There is now an incentive for us and a stake in what we do for the company and for our future.”
Once solely an oil dealer, Daigle Oil over the years has branched out into retail gasoline stations, propane and biofuel.
The company sells gasoline and diesel fuel at service stations from Fort Kent to Bangor in addition to supplying and delivering wholesale fuel to agriculture, construction and forestry operations in northern and central Maine.
Creating an ESOP with the future well-being of employees in mind says a lot about a company’s owner, Keeling said.
“It really says a great deal about the style of the man or woman running that company,” he said. “And forming the ESOP helps ensure the company’s legacy and the culture of what they created.”
It’s a move both LeBouef and Daigle believe Guy Daigle would approve.
“I think Guy would be really proud of what Rick has done here,” LeBouef said. “It was always his dream to see his company grow and to keep it local.”