ESOP in Action: As told by the employee-owners who live it every day
This isn’t the first time you’ve heard us talk about our Employee Stock Ownership Plan (ESOP) and it certainly won’t be the last. We’re extremely proud to not only be a majority employee-owned company but be at the relative forefront of the movement, as well. (While the number of ESOPs grows every year, American employees still only control roughly 8% of all corporate equity in the United States.)
But this time we want to give things a little twist. Instead of hearing from Rich Robb or Steve Nicholls, the masterminds behind the idea, we sought out some new perspectives from MN employee-owners who have witnessed the transition first hand. What does an ESOP mean to them? And how has it changed their day-to-day routines at the company?
Residential Project Manager Rebecca McGhee started as an intern at MN six years ago and was not surprised by the company’s leap to ESOP status in 2016. “Unlike some of the other places where I’ve worked, change isn’t something that’s feared at MN,” she says. “We see it as an opportunity to grow.” The tangible benefits of an ESOP were made crystal clear to her the day Rich called her into his office, handed her an envelope, and said, “This is your share of the valuation of MN.” A light bulb went off in her head. “We all want the company to succeed because we all benefit from its success,” she says. “And the success of an ESOP is directly tied to how emotionally invested each individual is in the company.”
Is Rebecca emotionally invested? You betcha. In fact, when asked how the ESOP has changed her day-to-day operations, she laughs. “The [self-imposed] guilt trips are awful,” she says. “I’ve always been a responsible, hard-working type. But now in an ESOP, if I’m not finishing that project on time or on budget, it affects everyone. There’s a real culture of accountability here at MN. An incentive to be excellent every day—and that’s an exciting vibe to be around.”
American employees still only control roughly 8% of all corporate equity in the United States.
Like Rebecca, Construction Supervisor Ernesto Ferrel worked his way up at MN, starting as a carpenter apprentice in 2010, so it’s no surprise he equates MN’s investment in an ESOP to his own investment in the tools of his lifelong trade.“Hey, if you want to do good work as a carpenter, you need the right tools,” he says. To Ernesto, the ESOP is the tool that helps his company consistently do great work.
What Ernesto finds most appealing about the ESOP at MN is how it helps create a long-term career path for people in his trade. In a non-ESOP setting, especially in construction, there’s a lot of turnover because, as Ernesto sees it, you have to change your job if you want to change your wages. Not so with a company that allows employees an ownership stake. “I’m here to build something for my future, for my retirement, for my sons.”
When asked if being part of an ESOP has dramatically changed anything about the way he approaches his job, Ernesto chuckles. “I tell my people to pick up every screw. We can use it,” he says. And with lumber costs skyrocketing, the same frugality applies to other materials, too. Scrap wood from one job site can be used for bracing on another. “It may not seem like a big deal but it all adds up,” he says. “It doesn’t just cut down on waste and make for a cleaner job site. It’s my way to show the guys where to save money so we can all have bigger paychecks in the future.”
“And the success of an ESOP is directly tied to how emotionally invested each individual is in the company.”
Purchasing and Facilities Manager Rob Jackson is in his seventh year at MN Builders. Like many MN employee-owners, he came to the construction game later in life and so has had a lot of exposure to other industries and work situations. “Almost immediately I could tell MN was different and a good place to work,” he remembers. “And now the ESOP just makes it better.”
For Rob, the ESOP is another example of MN’s unique company culture. He says the company’s willingness to help him find the job that best suits him at MN (he’s held several) is what has kept him around. “They want us to find joy in what we do,” he says. “And that starts with encouraging us to find the best fit.”
For Rob, that great fit has been as a purchasing and facilities manager. And from this vantage point, he has observed an interesting change on the shop floor since the ESOP went into place. Almost every day he hears people asking questions. Good questions. Am I doing this right? How can we do this better? Have we ever tried this? Even more interesting, these questions are not just contained to a person’s specific job or area of expertise. People are eager to learn about parts of the company that previously they considered none of their business. Not anymore. “Now the business is everybody’s business,” Rob says. “And everybody is interested in finding new and better ways to help it grow.”