The Steps to Launching and Relaunching Your ESOP

Posted by Jason Wellman on Wed, Jun 17, 2020
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crowd-participating-at-event_4460x4460.jpgYou’ve sold your company to an ESOP. Now what? The way in which you launch your company’s ESOP can have lasting effects on the success of the ESOP and the buy-in and dedication of the employees. It is even beneficial to complete relaunches annually. The launch and subsequent relaunches should occur in a similar sequence every time.

  1. Stage one of launching your ESOP begins with an announcement letterfrom the primary owner(s) with a personal message about why the decision was made to create an ESOP as a part of their succession planning. This announcement could and should also act as a “save the date” for an ESOP Rollout meeting. On the “ESOP-iversary,” it’s a good idea to relaunch the company’s ESOP. You will send a save the date for this meeting, as well.
  2. An educational ESOP Rollout meeting should be completed approximately two to three after the personal announcement letter from the owner or owners. This meeting will feature a presentation that lays out all of the ESOP basics and custom elements with the ESOP plan documents for the company. The presentation will feature the history of ESOPs and basic ESOP concepts like eligibility, vesting, and distributions in layman terms. Each of these basic ESOP concepts would be centered around the specifics within the company’s ESOP plan documents. The mechanics of the company’s ESOP would also be reviewed in layman terms to help all participants understand the overall process from start to finish. On the “ESOP-iversary,” you will celebrate the company’s anniversary of the ESOP and review the reason why the owner sold to an ESOP on that day. This will help cement the company’s history for future generations of workers.
  3. Establish an ESOP Committee. The focus of this committee should be based on a strategic list of goals outlined by the board of directors to ensure an ownership culture takes hold within the company. If you are in the relaunch process, this is the time to review of the ESOP committee and the start of a new strategic plan for the next 12 months according to the vision of the Board of Directors to ensure growth continues within the ESOP Ownership Culture.
  4. Form or review your annual communications plan. The ESOP Committee can work on the communicationschedule and create or assist in distribution/presentation of the monthly information.  This would also be a great time to complete and submit an application for one of the seven Annual Awards for Communications Excellence or AACE awards.  Another area of focus should be submitting an application for ESOP Company and ESOP Employee Owner of the Year within your local chapter.
  5. Monthly communications to all employees are critical to ensure your ESOP Ownership Culture is maintained after the roll out meeting or anniversary participant statement meeting. Make sure that you are including different touchpoints throughout the year that speak to the entirety of the workforce. This could include various methods of communication like webinars, videos, newsletters, emails, or educational documents.
  6. Celebrating Employee Ownership Month(October) is an enjoyable and effective way to educate and excite employees further! You can create a themed shirt and plan fun ESOP related games & activities. Food should always be involved when you are celebrating Employee Ownership Month. Be sure to budget for these special activities each year to engage your participants.

Incorporating this cycle of launching and relaunching your ESOP will go far in creating and maintaining a positive and successful company culture. Engaged, educated, and excited employee owners are happy employee owners!

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Topics: Communications and Culture

Jason Wellman
Written by Jason Wellman

Jason, the Director of Ownership Culture, helps employee-owned companies by developing a comprehensive Ownership Culture through proactive educational resources for all participants to improve their understanding of this unique, nontraditional benefit we call an ESOP.

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