July 16, 2019
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Employee ownership works for Maine

Julia Bayly | BDN
Julia Bayly | BDN
Daigle Oil Co. announced in 2015 that the company is now in the hands of its employees after forming an employee stock ownership plan, or ESOP. “I’m happy with this because it’s a nice investment for the future,” Gail Levesque [right] customer service representative, said. Working in the front office with her are Sonya LeBouef, brand manager; and Evan Richards, dispatcher.

Employee ownership of businesses is not well known nor often not well understood. However, at its core it is a simple concept: ownership of an enterprise by those most impacted and able to determine its success. Employee-owners understand that our collective success leads to our individual success and vice versa.

In an employee-owned company, the hard work of employees and financial rewards that come from that work accrue to the employees because they own the company. There isn’t any greater incentive, engagement and ownership in what you do than to be working for your own benefit.

Employee Stock Ownership Plans (ESOP) have been around for decades. They are enabled by federal law and regulated by the IRS and the U.S. Department of Labor. Fundamentally, an ESOP is a retirement plan that functions very much like a 401k. There are more than 6,500 ESOPs in the U.S. with more than 14 million participants.

While the retirement benefit and ability to build wealth through an ESOP is wonderful, the culture in an employee-owned company is the biggest benefit. From young to not so young, our experience is that employee-owners in ESOPs care and are enthused about the work they do and how their work is connected to the success of the company. Employee-owners understand that it is employees who make a company successful. Therefore, it is employees who should benefit from the outcomes of their efforts.

Our company, Sebago Technics, was founded in 1981 by Walter P. Stinson. Like many entrepreneurs, he began at his kitchen table, took risks and worked hard. Sebago gained a well-earned reputation, hired more people, and served hundreds then thousands of property owners, businesses, contractors, developers and communities. By the mid-1990s Sebago had grown into a multi-discipline engineering firm employing dozens of professionals.

Though more than 10 years from retirement, Stinson began to think about ownership succession. He explored the common options — sale to another firm (often out-of-state), or to one or two current employees or running the business until retirement then closing it. However, during his search he discovered the ESOP model.

He determined that an ESOP was the best choice for one compelling reason — the company’s success was due to its employees and it was they who should reap the benefits going forward. In 1998, Sebago became one of a few ESOPs in Maine. Today, more than 20 years later, Sebago Technics stands as one of Maine’s largest engineering firms with tenured employees who are proud owners of not only the company, but also significant ESOP retirement accounts.

ESOPs in Maine are on the rise with the number of ESOPs in Maine estimated to have grown from 15 to more than 40. Employee-owned companies now represent every corner of the state and span every industry from construction to engineering, financial services to agriculture and manufacturing to technology. Maine ESOP companies represent some of our best-known brands and recognizable businesses — Cianbro, Sargent, LandryFrench, Daigle Oil, Johnny’s Seeds, Revision Energy, Clark Insurance, Portland Air Freight, Dennis Paper, Howell Labs, Moody’s Collision, Lanco and dozens more.

LD 1520 — An Act to Create and Sustain Jobs through Development of Employee-Owned Businesses and Cooperatives — which is currently before the Legislature, is an opportunity to further grow employee ownership in Maine. If passed, it would support and incentivize the creation of new ESOPs and a forum to share ideas. Passage of LD 1520 would place Maine among the growing number of states where state centers for employee ownership have helped grow, inform and sustain employee ownership.

Passage of LD 1520 will recognize, at the highest levels, that local ownership and control is vital to our economic future. It will acknowledge that employees should benefit from their work with more than just a paycheck. In these ways it would harken back to the beginnings of business in Maine where most people were self-employed, where success and destiny was in proportion to their contributions.

Mark Adams is president/CEO of Sebago Technics, a 100 percent employee-owned engineering consulting company located in South Portland.

 



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