Certified Employee-Owned

A few hundred workers at a company in Vermont are about to share in about $1B. They will get over $1M each on average. Some will get as much as $10M. Most of these will ?????? be executives - they will be receptionists, salespeople, analysts, etc. They didn't win some big State lottery with a shared lucky ticket. This is the magic of employee ownership at work. Here's their story. Vermont Information Processing Inc. (VIP) was a 45-person company and had been around for 30 years when its founder, Howard Aiken, sold it to his employees through an Employee Stock Ownership Plan (ESOP) in 2001. That means the company became 100% owned by its workers and Aiken would have been paid the purchase price out of company cash flow over time. VIP is a technology provider for the beverage industry. By 2010, it had grown pretty well - it had about 124 employees and was worth about $42M. Not bad! In an ESOP, when an employee leaves the company their shares are repurchased. That year, in 2010, they paid about $1M to exiting workers. Then things started to take off. They reached $100M in valuation by 2015, and by 2021, the last year data is available, they were worth almost $400M and had almost 400 employees. They bought 5 companies in that time, adding their employees to the ESOP and showing how employee-owned companies can compete and win. Between 2019 and 2021 they paid out about $75M to exiting employees. This small company based in Colchester, Vermont (population 17,524) had become an incredible engine of worker wealth, and had stayed rooted in their local community. They bought two more companies in 2022. This week they announced that they are being acquired by the massive private equity company Warburg Pinkus for $1B. 100% of the proceeds of that sale will go to workers. In an ESOP, once an employee has worked for a year, they start getting shares. They don't pay for their shares - it's a benefit of working for an ESOP-owned companies. That means it's inclusive and accessible and one of the best inventions ever for distributing wealth to the people that really create it. The longer you work for a company, the more shares you get. The American ESOP is a public policy miracle. It started in 1974 and has broad support from Republicans and Democrats alike. It has been enhanced many times due to its incredibly good outcomes, like the $2.1T in wealth currently held by workers in ESOP-owned companies. Sometimes (rarely) ESOPs don't work. Sometimes they lead to pretty good outcomes. And sometimes a Vermont businessman can sell his business for a fair price, creating a platform that pays out over $1,100,000,000 to real workers. ESOPs give every day American workers a chance to hit the kind of home run normally reserved for CEOs and finance-types. Canada launched our version of the ESOP, called an EOT, in June. One day I'm going to write a post like this about a Canadian company. That will be a great day.

Our latest blog post highlights the opportunity for states to accelerate economic growth by supporting ESOPs, and highlights a few recent examples from North Carolina and California: https://lnkd.in/ef-9ZaHT

Looking for a job at an #EmployeeOwnership company? Check this out by Certified Employee-Owned https://lnkd.in/grR_4pWZ #jobs

Embracing employee ownership back in 2020 has been a game-changer for our team. It’s strengthened our culture, driven engagement, and helped us achieve shared success. Discover how this model benefits businesses and employees alike- read on below. Certified Employee-Owned #employeeownership