What’s an Employee Stock Ownership Plan? It is a like a stock offering for employees only. It requires no funding from employees, yet it allows companies to remain locally owned while giving employees a direct and meaningful stake in the performance of the business. The Employee Stock Ownership Plan is a way to reward people for their hard work, and owners and founders for taking real risk and becoming successful. Plus, many Employee Stock Ownership Plan companies report their employees are very engaged in the company’s financial success and growth, since it affects the value of their ownership directly. Several well-known Maine companies are Employee Stock Ownership Plan, including Moody’s Collision Centers, Cianbro, Johnny’s Selected Seeds and Landry & French Construction.
However, Employee Stock Ownership Plan conversion is not for everyone. Companies should have at least 20 employees to be able to absorb the transactional costs; have enough of a history of stability and consistent profitability to borrow money to fund the transaction and still run the company; and have a culture open to sharing ownership.