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Employee owned sounded good when I joined my last company, but there was one downside that led to it's demise! The founders were both in their 80s and their est

Employee owned sounded good when I joined my last company, but there was one downside that led to it's demise! The founders were both in their 80s and their estate was going to sell their shares (plus a lot of early employees with many shares were retiring). Unfortunately the company could not get enough cash to buy the hundreds of millions needed for this - so the company was sold at a discount to a larger competitor.

jawns 7y ago
This seems strange. Surely with the popularity of employee ownership (here's a list of some of the biggest employee-owned companies https://www.nceo.org/articles/employee-ownership-100 https://www.nceo.org/articles/employee-ownership-100 ) that aspect of it must have been figured out by now.
- roland35 7y ago
  This specifically was an ESOP which as I understood it was more popular in the 1970s when the company was started. You are probably right, there could be improved corporate structures now!
  - dragonwriter 7y ago
    I'm pretty sure labor coops, which don't have this problem, are much older than ESOPs (maybe a century older.)
cptskippy 7y ago
That's something am employee owned company plans, yours did not.
- roland35 7y ago
  I'm surprised how quickly it fell apart too! I joined the company thinking it has had stable growth for decades. Certainly with the founders in their 80s this should not have been a surprise!
LatteLazy 7y ago
Sounds like classic mismanagement to me. Part of being employee owned is that you need to manage the age profile of you're employees and make sure you don't get too much equity build up in any one group. Otherwise greedy idiots end up owning 80% of the company. Then they can't sell it for fair value because there are no buyers when they want to leave...
- saghm 7y ago
  My father has worked for an employee-owned company for the past few decades; he joined when there were maybe 50 people, and now I think there's maybe on the order of several hundred. He's starting to get close to retirement age now, but sometime back in the late 90s/early 2000s, he had to pick a date in advance for when he'd start selling his stock back to the company because they wouldn't have enough cash to buy it all back at once if they waited until he did retire. That date occurred a few years ago, so he's already sold back most of his stock to the company even though he doesn't plan on retiring for another several years. Obviously this strategy doesn't handle stuff like freak accidents that would have made it impossible for him to continue working, but having the company and employee agree on a date well before the expected age of retirement to start selling the stock back seems like a no-brainer.

jawns 7y ago

This seems strange. Surely with the popularity of employee ownership (here's a list of some of the biggest employee-owned companies https://www.nceo.org/articles/employee-ownership-100 https://www.nceo.org/articles/employee-ownership-100 ) that aspect of it must have been figured out by now.

roland35 7y ago
This specifically was an ESOP which as I understood it was more popular in the 1970s when the company was started. You are probably right, there could be improved corporate structures now!
- dragonwriter 7y ago
  I'm pretty sure labor coops, which don't have this problem, are much older than ESOPs (maybe a century older.)

cptskippy 7y ago

That's something am employee owned company plans, yours did not.

roland35 7y ago
I'm surprised how quickly it fell apart too! I joined the company thinking it has had stable growth for decades. Certainly with the founders in their 80s this should not have been a surprise!

LatteLazy 7y ago

Sounds like classic mismanagement to me. Part of being employee owned is that you need to manage the age profile of you're employees and make sure you don't get too much equity build up in any one group. Otherwise greedy idiots end up owning 80% of the company. Then they can't sell it for fair value because there are no buyers when they want to leave...

saghm 7y ago
My father has worked for an employee-owned company for the past few decades; he joined when there were maybe 50 people, and now I think there's maybe on the order of several hundred. He's starting to get close to retirement age now, but sometime back in the late 90s/early 2000s, he had to pick a date in advance for when he'd start selling his stock back to the company because they wouldn't have enough cash to buy it all back at once if they waited until he did retire. That date occurred a few years ago, so he's already sold back most of his stock to the company even though he doesn't plan on retiring for another several years. Obviously this strategy doesn't handle stuff like freak accidents that would have made it impossible for him to continue working, but having the company and employee agree on a date well before the expected age of retirement to start selling the stock back seems like a no-brainer.