By: Pete Strange And Kathy Daly
We are often asked what led us to form an Employee Owned S Corporation (S ESOP) at Messer Construction. The answer for us was the crisis caused by the death of the last son of our founder. For the first fifty years Messer was a very good, family-owned company, and we, like our colleagues, had good careers in that framework. But in 1988 our world changed when we found ourselves working for a company that was owned by the third generation of the family who were not engaged in company leadership.
As part of the crisis conversation, the new leadership asked us about our ideas for the future. This was a new question for us because we had mostly been in the trenches building buildings, families and careers. This caused us to step back and ask ourselves what we would value most about the future of our company. The answers for us were all about engagement. We sought an opportunity to work in an environment where we could benefit as employees in proportion to the value we helped create for the company overall. It seemed like pie in the sky in those early conversations – until we discovered the S ESOP structure. For us it was the answer.
As we celebrate 25 years of employee ownership, we recognize the great value the S ESOP structure has brought to our customers, communities, and, not least important, our employee owners.
- Since none of us came from accumulated wealth, the S ESOP structure was the only structure that allowed workers to successfully purchase an operating enterprise.
- Widely distributed employee ownership created both a clear succession plan and a direct connection between performance and personal success among employees.
- Moving the conversation with our employees from “making a living” to “making a life” has caused us to focus on the long term, making us more competitive in our recruiting and resulting in much deeper engagement with our surrounding communities. For example, Messer and its employee owners have contributed over $19 million to community projects.
- Presenting our business plans to an independent valuation professional each year has increased transparency and transformed our business practices.
Why has all of this been important? When our S ESOP started, Messer had about two hundred employees and performed about $100 million in construction work from a single office in Cincinnati, Ohio. In 2015 more than 1000 Messer employees produced $1 billion in work from nine reginal offices in the Midwest and South. What’s more is, we feel we outperformed our peers because Messer employees felt they had a stake in the future they were creating.
S ESOP ownership isn’t right for everyone. It doesn’t automatically translate to more growth, improved productivity and happier employees. But as we enter our second twenty-five years of employee ownership we believe the S ESOP was the right structure to realize our goals of growing our business, creating opportunity for high-performing, caring, committed workers and providing the highest level of service to our customers and communities.
Pete Strange started his career with Messer Construction as a field engineer in 1968. In 1990 he led the negotiations that resulted in 100% employee ownership of Messer and became CEO of the company. While retired from management, he remains engaged with the company on strategic issues. Pete is a graduate of the University of Cincinnati.
Kathleen C. Daly spent 40 years with Messer, starting as a Cost Accountant on a construction site and retiring as Chief Financial Officer. She has continued to serve Messer since her retirement as a Consultant and Member of the Board of Directors for ESCA. She is a graduate of the University of Dayton.