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David West
April 15, 2019
A few years ago, I wrote about the new ownership structure at Equinox. Using the Employee Stock Ownership Plan (ESOP) structure, Equinox became an employee owned company in 2015.
The first ESOP in the US was created in the 1950s. In the years since, members of Congress from both parties have worked together to enact legislation that makes it easier for companies to become an ESOP and ensure that all employees in an ESOP are treated fairly.
This week, Equinox President Wayne Lowe and I attended an annual gathering of ESOP companies. Going into the conference I thought I had a fairly good understanding of the ESOP structure and the benefits of being a part of an employee-owned company.
After spending three days in sessions on various ESOP topics, I realize I still have a lot to learn!
In order to ensure that every employee receives the maximum benefit of being an employee-owner, there are many, many rules and regulations that we have to follow. These include processes to ensure shares are distributed fairly and that funds are available to repurchase shares when an employee leaves or retires. It is clear why there are entire law firms, accounting practices, and administration companies that focus solely on ESOPs.
While the technical complexity is daunting, it wasn’t completely surprising to me. What I failed to grasp prior to this week is the almost religious fervor among the leaders and employees of ESOP companies.
Hearing from the leaders of many employee-owned companies it quickly became clear that deciding to become an ESOP is not merely a financial choice for owners and founders. Employee ownership is part of a broader movement to re-envision capitalism. This is not, however, merely a “feel-good” story of a small number of high-minded people. Based on results from thousands of ESOP companies over many decades, the evidence is clear and compelling—ESOPs are not only more equitable and sustainable, but they are also consistently more profitable. These companies enjoy much higher employee retention rates and morale. And ESOP employees retire with significantly more wealth then their non-ESOP peers.
I leave the conference grateful that I am part of such a company and appreciative to Byron and Wayne for choosing this path for Equinox. I also leave with an increased sense of the responsibility I have to be a good steward of our company and to fully leverage all the benefits being not just an employee but an owner.
David West is Executive Vice President of Equinox Information Systems. David oversees the company’s sales and marketing team, develops the company’s long-term strategic plan, and works directly with the company’s hundreds of customers across the United States, Europe, Australia, and Asia. When he is not making sales calls or updating spreadsheets, he enjoys spending time with his family, playing basketball, and serving his community through his efforts at St. Bartholomew’s Church and One Voice Nashville. To learn more about Equinox, its products, and the people who power them, visit www.equinoxis.com or call (615) 612-1200.
