The 211 people who work at Covenant Eyes now own the business through a financial vehicle called an Employee Stock Ownership Plan (ESOP).
As of December 31, 2020, Covenant Eyes Inc. belongs to its 211 employees. President, CEO, and co-founder Ron DeHaas previously held the majority interest in the company, along with a few other investors close to the company. The transfer means employees directly benefit from the growth of the company overall and own a stake in the company.
“I can’t think of anyone better to sell the company to than those who work to make it the best service every day,” said DeHaas. “They are the ones who are committed most to continuing the Covenant Eyes mission, and they are the ones who will ultimately benefit from its growth in the future.” DeHaas plans to stay as the president and CEO of Covenant Eyes. Company executives will also continue to make high-level decisions for the company.
Employees learned about adding “owner” to their titles at an online company meeting January 14, 2021. “I’m thrilled that the company I work for cares so much about me and my future to provide me this additional benefit,” said Rhonda Robinson, a human resources assistant who has worked at Covenant Eyes for more than four years. “This is one more reason why I love Covenant Eyes, and now I own part of this very important work and will benefit from its future growth.”
Ron’s decision to sell the company comes 20 years after starting it. He wanted to ensure that Covenant Eyes would always be true to its commitment and wouldn’t be sold to other interests that could have taken it in another direction.
According to The Employee Ownership Foundation’s 24th Annual ESOP Economic Performance Survey, most ESOP companies showed increases in productivity, revenue, stock value, and profitability, all of which benefit employees. If there is a separation between the company and employee, the employee is compensated their share of the company’s fair market value.
“It is exciting to see such a big increase in the number of employee-owners in the United States as well as the wealth creation associated with Employee Stock Ownership Plans. According to the National Center for Employee Ownership (NCEO), there are now 14 million ESOP participants with ESOP balances of $1.4 billion,” added Aaron Juckett, president, and founder of ESOP Partners, the firm that led the transition.
In Michigan, there are 172 privately held ESOP companies and only a handful that are 100% employee owned. These employee-owned companies employ approximately 31,000 employee-owners.
“Covenant Eyes employees have always ‘bought in’ to how accountability helps with those who want to stop looking at pornography. Now, they’re literally bought in as owners and share in all of the financial benefits of a growing company,” said DeHaas.
Covenant Eyes employees pay nothing to be owners of the company. The company pays for their ownership through profits being reinvested. There is a vesting-time requirement for new employees to become co-owners.
About Covenant Eyes
Pornography is corrupting hundreds of millions of people. Covenant Eyes exists to change the course of history by enabling the world to overcome porn and be restored and transformed.
About ESOP Partners
ESOP Partners is an ESOP service provider that changes lives by creating wealth and sustainable employment through employee ownership and works with business owners and companies to determine if an ESOP is a good fit for their situation. ESOP Partners establishes, maintains, and sustains employee stock ownership plans (ESOPs) throughout the lifecycle to maximize the benefits of being an ESOP company and provide employees with an ownership stake in the company that they work for.
Employee Stock Ownership Plans (ESOPs) are qualified retirement plans that buy, hold, and sell company stock for the benefit of the employees, providing an ownership stake in the company. ESOPs are the only retirement plan allowed to borrow money to purchase stock and are generally funded only by the company. Selling part or all of a business to an ESOP enables a business owner to sell to a built-in buyer in as little as 90 days at full fair market value. There are many significant tax and cash flow benefits of selling to an ESOP. An ESOP also allows for a better-managed ownership transition, preservation of local jobs, and the maintenance of a company’s legacy in the community. According to the National Center for Employee Ownership (NCEO), there are approximately 10,000 ESOPs in place in the U.S., covering 10.3 million employees. There are less than 2,500 ESOP companies that are 100% owned by their employees.
Read the press release here.