By Pat Mosher
At HNTB, an infrastructure solutions firm and ESCA Board member, the foundation for an employee stock ownership plan (ESOP) was laid during our transition from a private partnership to an S-corporation in the mid-1990s. An ESOP was the perfect solution to spread the benefits of corporate ownership from a small group of executives to all HNTB employees.
This transition was a key moment in our firm’s 102-year history, and we thoughtfully designed our plan with the input of advisers and employees. In 2000, HNTB made the ESOP available to employees across the firm, enabling them to realize a direct return on the success of the company – success they had a hand in creating.
Over the course of the last 16 years as an employee-owned S-corporation, our ESOP has grown to be the majority owner of the firm, almost 75 percent of outstanding shares. Employees have also enjoyed compounded annual growth in the ESOP that has outperformed the S&P 500 by more than 10 percent since 2000, meaning the value of the ESOP has grown 3,580 percent from the original balance.
In my opinion, growth in plan participation is a direct result of making the ESOP part of our culture. Since making the move to an ESOP, HNTB has worked to help its employees take advantage of all the benefits the firm offers, including retirement savings plans. Saving and investment education is offered throughout the year to the more than 3,800 employees across the United States – in addition to the ESOP shares and a solid 401(k) plan.
Over time it’s become apparent that when employees become more knowledgeable about the basics of investing, they see the value of our ownership plan and not only enroll, but also make it a vital part of their retirement planning.
The growth in plan participation over the years is evidence that what HNTB is doing works. Our employees feel invested in the firm and what they do, because they are owners.
Pat Mosher is chair of HNTB’s ESOP advisory group and an ESCA Board member.