ESOP Fables

From earlier this spring, Signs of a magnetic pole flip in company ownership by Matt Web:

What if the dominant model of company ownership inverts? What if we’re at the end of an era of companies being owned by external stockholders, and at the beginning of bottom-up ownership by the people who do the work – the employees? 

The signature example of employee-ownership Matt cites is ustwo, a company—er, fampany—that I have some familiarity with, as my friend Jonas worked from their Malmö branch for some years.

Yankee Publishing, my client for more than 25 years, made the transition from 84 years of family ownership to becoming an ESOP—employee stock ownership plan in 2019:

ESOPs are a way for family-owned business to keep their business intact. Yankee, which has been family owned for 84 years, now has 17 owners including the fourth generation, with no clear successor, Jamie Trowbridge, president and CEO — and a third-generation owner himself — explained to NH Business Review.

“The family members were all in favor of this,” said Trowbridge, who has been working on the plan to transition the company to an ESOP for the last 2 1/2 years. “The alternative would probably have been to sell the assets off to different buyers, breaking up the company, and perhaps moving pieces elsewhere. That was unacceptable to us. We didn’t like the idea of good paying jobs leaving New Hampshire.”

I’m not a part of the ESOP—I’m a vendor, not an employee—but the benefits of the ESOP to me, inasmuch as they’re allowing the company to remain intact and right-scaled, are clear.