What It Means to Be an ESOP Company
CCL’s journey to becoming 100% employee-owned
What’s an ESOP?
An Employee Stock Ownership Plan (ESOP) is a type of employee benefit plan that enables employees to own part of the company they work for. Over the course of an employee’s career, they accumulate company stock, without ever having to purchase it. Then, upon retirement, they receive often significant cash out from the ESOP.
100% Employee Owned
On April 1, 2021, CCL proudly became 100% employee-owned. For Harvey, CCL’s CEO and (now former) sole owner, this has been a long time coming. For almost a decade before officially declaring CCL an ESOP in 2014, Harvey had been considering this path. In contemplating the future of CCL, he knew he didn’t want to sell to another corporation. Instead, he wanted to choose a direction that would best honor the team he built over the years, who had been foundational to CCL’s success. To him, that meant giving employees more opportunity and autonomy in their success. Tom McManus, CCL’s President, looks back on the 2014 transition fondly:
“How amazing is it that a guy who worked so hard to put a business on the map, grow it, make it a successful business…wanted to hand off a portion of it to its employees.”
At that time, 40% of CCL was employee-owned. Today, with Harvey officially selling 100% of his stock to the company in April, we are proud to say CCL is 100% employee-owned.
Everyone Gets a Stake
At CCL, every employee is entitled to join the ESOP program after a 1-year waiting period from their hire date. As soon as someone meets the requirements to join, they are allocated a stock every year until retirement. In addition, CCL has a yearly bonus program, in which every employee participating receives a bonus based on the company’s overall profitability. Harvey takes pride in hand-delivering these bonuses to each of the employees, along with individual ESOP statements. In the future, he plans to offer business and entrepreneurial classes to help each employee grow as a professional.
In an ESOP environment, collaboration becomes more important than ever. Those who you once called “coworkers” are now your “business partners,” meaning everyone has a say in the success of the business. Here are just a few ways the ESOP structure and mindset has helped make CCL stronger than ever before:
Even before becoming 100% employee-owned, the goals of CCL have always been the same – to offer only high-quality products and services, and to build genuine connections with each and every CCL customer. Since becoming an ESOP, every employee is able to live out this mission from an even stronger foundation. Together, we all work toward a common goal–knowing the quality of our work, on and off a job site, has a direct impact on the efficiency, profitability, and success of our business. We push hard, hold each other accountable, and take pride in everything we do.
Opportunity to Build Wealth
Unlike so many large corporations, everyone at CCL, no matter where they start out, has the opportunity to build their own wealth over the course of their career. Providing opportunity for financial strength and stability has always been Harvey’s priority, and continues to be his favorite part of leading the company now that he’s no longer owner.
“My favorite part of leading the company now is really giving people opportunities and building up wealth for the employee-owners. I’m a big believer in individuals having the ability to build up equity.” – Harvey
When we interview potential new employees at CCL, we now view them also from the lens of potential new business partners. Right from the first conversation, this creates a shift in the narrative. While our hiring standards were already high, they’ve gotten even higher. We look for people who are committed to staying long-term, building the business up with us, and seeing CCL as the start of a full, thriving career, not just a place to work. Plus, as an independent business, we don’t worry about the risk of ownership changes and the lack of consistency that comes with it.
Relationships with Management
Two key approaches we take to managing our ESOP are transparency and open-door management. It’s important to us that there’s an open dialogue between every level of employee and that people feel comfortable making suggestions and taking ownership over change. Since the transition, we’ve continued to ensure management is always available and we’ve seen people more engaged than they have been in the past. Everyone has the ability to contribute to our profitability and success and everyone feels empowered to do so.
When everyone has ownership over the business, everyone also has ownership over the way things get done. Gone are the days of employees feeling unhappy with the way things are going, but feeling and being powerless to fix it. From finding more efficient ways to serve our customers all the way down to avoiding paper waste in our facilities, the team knows what needs to be taken care of (and who’s going to pay for it if it doesn’t). From the very first day someone is hired, they already have their mind on the customer, the company, and the team.
Chris Vaughan, CCL’s Marketing and Communications Manager, had the unique experience of working in a corporate environment before coming on at CCL. Even before the ESOP, he noticed a drastic difference in culture from his previous job. Moving to CCL he said, “felt less like work and more like a career.” In an industry that can be very corporate and ego-driven, both Chris and Tom found CCL to be refreshing. From the start of his career at CCL, Chris mentions he thought “it can’t get better than this” but then, he notes “it did with the transition to ESOP.” While Harvey had the opportunity to simply sell the incredible business he’d built up for so many years, he chose instead to pass his success on to his employees. As Tom puts it:
“It’s so nice to work for a guy that has no ego. He doesn’t do this to make more money. He does this because he recognizes that without the structure of the people he put around him, he wouldn’t have been successful. That takes a lot of humility to look in the mirror and realize he is who he is because of who’s behind him.”
As with every decision Harvey has made since taking over the business from his father in 1985, including the decision to consolidate our previous two locations into one, the move to becoming an ESOP had the employee’s best interest at its core.
A Single Focus
The foundation we built at CCL – the investment in our employees and our business – is all with and for a single focus: you, our customer. By building a business to be proud of, we hope to be a business you are proud to partner with. Harvey sees it like this (good advice for any business) “if you really take care of your people and they have an interest in the success of the company, the rest will take care of itself.” Chris has seen this impact firsthand since the transition. He says:
“When customers are doing business with us, they look at us a little differently. They know everyone is in it for the greater good, not just driving profit up the ladder.”
A Foundation for Growth
Since the beginning, CCL has always had an eye on the future. Time moves fast, and it’s the only way to stay ahead. By staying up to date on what’s going on in the market, and staying open to opportunities that arise, CCL will always be in a position for growth. In the short term, we have a plan to expand our lumber yard in 2021. And the long term? Harvey says it best:
“We’re here to stay. Basically, the company exists for the benefit of the employees. There is no corporation that owns it that has to take anything out of it. Everything from here on in, everything the company does is for our employees’ benefit.”