Axios Inc. announced its employees have purchased the company through a 100 percent Employee Stock Ownership Plan.
The process began earlier this year, after several years of discussion by company CEO and owner Daniel Barcheski, President Kellie Haines and Anne Hayes, vice president of operations. The three decided that, rather than sell off the human resources services company, a better option for everyone would be creating an ESOP.
Axios worked with law firm Dickinson Wright to develop the plan and coordinate the transition.
“It’s a qualified retirement plan approved by the Internal Revenue Service that allows the employees of a company to acquire the stock of the company,” explained Frank Dunten, an attorney with the firm. “At the end of the day, a trust for the benefit of the employees owns the company.
“Each year contributions are made to employee accounts; monies are invested in company stock. That investment grows while they are working at the company, and when they retire, their shares are cashed in and they get the money.”
An independent trustee oversees the trust, and shares are valued by an independent appraiser to help ensure employee interests remain protected.
Barcheski said the move was a natural fit for the business, which he said already operates as an “open-book” company by sharing its financial reports and strategic plan, among other things, with employees.
ESOPs have been known to provide up to three times more retirement wealth to employees than non-ESOPs, and The ESOP Association has reported that ESOP companies have increased share value and better productivity.
Barcheski said he hopes this move will help his employees — many of whom have spent years with the company — when they move into retirement, by providing them with both company shares and their 401(k) plans.
“They have the opportunity to grow as the company grows, and to save on their own,” said Barcheski.
Axios employees have taken the news positively for the most part, although Barcheski said there was some confusion initially about what the ESOP would mean. To help employees with the transition, the company will continue to hold informational meetings and has formed several committees, including a communications committee to help share information.
“I would say that, in this environment, ESOPs offer an opportunity for owners to sell their companies in a manner that is more likely to protect the employees’ jobs and keep the company locally owned,” said Dunten. “In these times, a lot of owners want that.”
Barcheski said that neither he nor Haines and Hayes have any immediate departure plans. When they do depart, however, they are confident the company will continue to grow.
According to The National Center for Employee Ownership, 11,000 companies now have ESOPs, covering 13 million employees