Some research suggests ESOP (employee stock ownership plans) can benefit employees and their companies, Some businesses, including IT service providers, are transitioning to ESOP ownership when it makes sense for the company.
The latest example: LJT & Associates Inc. of Columbia, Maryland transitioned to an ESOP this year. LJT currently offers several engineering services, including IT Systems Engineering and Cyberspace Security Support Services -- along with a lengthy list of familiar technology services.
The widow of the late owner, Leon John Tasheiko, wanted a way to release her ownership in the company without taking away from the management team and company culture her husband had already established. This ultimately led LJT to Menke and Associates, Inc., a firm specializing in Employee Stock Ownership Plans.
Robert Conrad, president and CEO of LJT, believes the ESOP will enhance the company’s ability to continue to recruit and retain the best and brightest employees and encourage further employee involvement in areas such as productivity improvement and enhanced customer service. He believes that the plan will increase the employee stake in the company, provide long-term retirement benefits, and incentive to increase value to customers.
According to Phil DeDominicis, the ESOP consultant at Menke who assisted the company in establishing the plan, about 23,000 companies have adopted ESOPs since they became legal in 1974. If you are thinking about transitioning to an ESOP, be sure to check out our ESOP Tips.