MCCC hosts virtual panel discussion
Panel talks about how employee stock ownership plans can build success
WHITPAIN >> The Baker Center of Excellence for Employee Ownership and Business Transformation at Montgomery County Community College recently hosted a virtual panel discussion focused on employee stock ownership plans (ESOPs).
The event was the kick-off panel discussion for the newlyformed Baker Center of Excellence, founded earlier this year with a gift of $3 million from Kenneth Baker. Located at the college’s Whitpain campus, the Baker Center will be a component of the college’s approach to workforce development — designing and delivering courses and program to assist employers interested in advancing employee skills.
An employee stock ownership plan is an employee benefit plan that gives workers ownership interest in the company. They have been considered qualified plans since passage of the Employee Retirement Income Security Act of 1974.
During the one-hour conversation May 12, panelists discussed how the plans can unlock success for regional businesses and their employees help with economic recovery, and how the center can support that effort.
Kyle Longacre, MCCC Dean of Workforce and Economic Development, led the discussion. Panelists included: Baker, CEO, NewAge Industries, a 100% employeeowned company in Southampton; David Zellers Jr., director of Commerce, Montgomery County; Edward Renenger, president and CEO, SES ESOP Industries, Bala Cynwyd; Paul K. Johnson, MCCC marketing/management assistant professor; and Ford Smith, estimator, Employee Owner, at IT Landes, Harleysville.
“This is the beginning of a conversation that will continue and grow,” Longacre said. “The expertise we are able to bring together, but then the questions and the insights many others will bring to the conversation, we want to be able to convene that through the Baker Center.”
Baker said he began exploring the concept of an employee stock ownership plan for NewAge, of Southampton, after attending a seminar in the mid-90s. He said he wanted a high performance organization and thought “if I didn’t give ownership in the company to employees, I wouldn’t get a high performance company.”
“In 2006 I sold 30% of my shares of NewAge to employees. That was the start of my journey,” he said, adding that the effort has been “very successful.”
He said employee stock ownership plans are beneficial for employees — who gain ownership in the business, and employers — who will be able to attract and retain talented employees, develop a succession plan and see tax benefits as well.
According to Renenger, Montgomery County is the right place for employee stock ownership plans, because of the number of businesses in the county that have a desire to benefit the community as a whole and that have “deep roots in the community.”
“The desire to give back to the community is a pervasive part of the mindset we experience on a regular basis. Combining that mindset with the concept of employee ownership tends to be very powerful,” he said.
Smith said he was looking “to put my roots down,” and looking for a company he could retire from. He heard about IT Landes and started to research employee stock ownership plans.
“Being with an ESOP company is great. Everything is an open book. The potential of retiring from a company like this is great. You put in a lot of work and you get a lot of benefits out of it. I want to be part of one of those success stories,” he said
Montgomery County Community College already includes employee owned stock ownership plans as part of its curriculum. Johnson said students in his principles of marketing class create a business and a marketing plan for the business.
“I ask them, ‘would they consider an ESOP as a model for the business and why or why not,’” he said. The topic is also part of his principles of management class.
The panelists agreed that awareness and misinformation are the biggest hurdles facing employee stock ownership plans — business owners are unaware that they are a possible option, and employees have limited knowledge about the plans.
“To the extent the Baker Center can educate students — so they can to take it into the workplace and to the extent the entrepreneurs become more aware and the center is part of that — is very valuable,” Renenger said.
“My hope is we are able to educate a lot of selling shareholders and employees of companies about the benefits, structure and rules of ESOPs and we create a lot more of them in Montgomery County and Pennsylvania. I think it is the best business model out there. There is no other model that has all the benefits and feature of ESOPs,” Baker said.
Johnson said Montgomery County Community College students will gain knowledge they can take into the workforce, using that knowledge to inform their employment choices.
“Businesses need to differentiate themselves as a place to work — ESOPs do that,” he said.
Zellers said there is a different energy at companies that have an employee stock ownership plan. He sees the Baker Center being beneficial to the broader community, by creating opportunities for employers to recruit employees and help the companies grow.
“Any time you have the ability to bring together and promote a critical mass of expertise, that is a game changer,” he said.
“Montgomery County has been a leader in manufacturing for many years — we have the most manufacturing jobs in the commonwealth. Any opportunity those manufacturers have to recruit employees and help employees grow in their professions and ultimately to keep the here, to jeep them local, makes for a more competitive region overall.”
For more information about the Baker Center of Excellence visit https://www.mc3.edu/degreesand-programs/career-trainingand-professional-development/ baker-center.