8/29/2022 Microplane News
What is an employee owned company? Employee owned companies issue shares retained by the employees, and no single person, family, or other party is the main stakeholder in the company. Working here means you, the actual employee have more ownership of the company than employees in privately held or publicly traded companies. How do employee owned companies work? Traditionally, employee owned companies operate just like a regular business. Each employee has an assigned role and follows a process to complete work. The significant difference is that the value of a 100% employee owned company rests on the shoulders of the team of people who, when successful, share in the profits. When you own shares, it means, unlike family-owned, private, or publicly traded companies, the company's profitability goes directly back to the employees - not the CEO, not the owner but to every worker. In the employee owned business model, the goal is to create wealth for the workers, not the top few managers.
Was Microplane always an employee owned company? Well, no, the story's exciting part is how the company became employee-owned. Microplane became a brand operating as a business unit in 1994. During that time, Richard Grace owned the company, and later, Chris Grace took over as CEO from his father. Chris started thinking about his legacy and realized that his kids might not want to run their father's company one day. Then, Chris decided to look for a potential succession plan that didn't keep the company "in the family." Chris started this process early! He realized he had more than most people and wanted to create wealth for his employees, some of whom have been with the company for over 22 years. In talking, as he says, with people on planes, golf courses, and other venues, it became clear that he should consider an employee owned company option as his succession plan for all the businesses and brands he managed as CEO under Grace Manufacturing.
Can you believe it took almost a year to complete all the paperwork? Employee owned companies are part of a trust called an employee stock ownership plan (or ESOP). On top of earning a wage, each employee is granted shares in the company as part of their compensation. Since each employee owns shares, they are shareholders in the company. As the company grows in value, so do each employee's shares. What are employee owned company pros and cons? For us, it is all positive. The good news is that employee owned companies tend to outperform other companies in productivity, higher profitability, and increased revenues. These improved results come from the motivation of all employees to increase the value of their own personal wealth. ESOP tends to provide better returns on shares than a 401K. You don't have to contribute to an ESOP like a 401K. Instead, the company gives you free shares for working here because when you start working for us, you become not only an employee but an owner.
About 6,500 US companies and more than 14 million employees are part of an ESOP. Microplane, a business within Grace Stakeholder Investments, has been proud to be one of those employee owned companies since 2019!