On June 20, 2014, the Record-Courier published:
The Davey Tree Expert Company in Kent has been named the largest employee-owned service firm company in the U.S., according to data from the National Center for Employee Ownership.
The NCEO’s 2014 Employee Ownership 100 list includes the nation’s largest companies that are at least 50 percent owned by an employee stock ownership plan or other broad-based employee ownership plan.
Davey, which employs 7,800 people, is the seventh-largest firm on the list that is 100 percent employee-owned and is the overall 17th largest in the U.S. by total employees. Davey has been employee-owned since 1979 and is the largest employee-owned company in Ohio.
“People are our greatest assets,” said Karl Warnke, Davey’s chairman, president and CEO. “We have been committed to employee ownership for 35 years, and that unwavering dedication has allowed Davey to grow and become a stable yet progressive institution.”
The companies on the list employ approximately 710,000 people worldwide, up from 674,000 in 2013. Companies on both the 2013 and 2014 lists saw their employment rise approximately 4 percent.
An estimated 11 million people currently participate in 12,000 ESOPs in the U.S., according to the NCEO. ESOP companies have an estimated $858 billion in stock participation plan assets.
Research shows ESOP companies that contribute significantly each year to an ownership plan, in addition to offering employees a means to participate in decisions affecting their jobs and that routinely share information about the company’s financial performance with their employees, perform better than firms that do not, according to the NCEO. Details on this research, as well as the full Employee Ownership 100, can be found at the NCEO’s website at www.nceo.org.
The full Employee Ownership 100 list is available online at www.nceo.org/articles/employee-ownership-100.
The Davey Tree Expert Company, with U.S. and Canadian operations in more than 47 states and five provinces, provides a variety of tree care, grounds maintenance and consulting services for the residential, utility, commercial, and government markets. Founded in 1880, Davey has been employee owned for 35 years and has more than 7,800 employees who provide Proven Solutions for a Growing World. For more information, visit www.davey.com.
Binary economist Louis Kelso was the architect and pioneer of the Employee Stock Ownership Plan (ESOP), which Kelso invented to enable working people without savings to buy stock in their employer company and pay for it out of its future dividend yield––on the promise of the capital investment’s future income.
The ESOP provides access by employees to capital credit to buy company stock and pay for it in pre-tax dollars out of what the assets underneath that stock yield. Bank loans are made to the ESOP trust that represents employees, instead of to the company (current owners). The trust gives the lender a note and with the borrowed monies makes the investment in the company stock. The company then issues stock to the ESOP trust. The company now has the money, which otherwise could have been borrowed directly without the ESOP (benefiting current owners), to make the planned investment and repay the loan from pre-tax forecasted future capital earnings. The company promises the bank to make pre-tax full-dividend payments to the ESOP trust to enable the trust to replay the lender. Assuming that it would take five years for that capital investment to pay for itself, at the end of five years the employees now own the full stock value in the expanded company.
Companies can use the ESOP as the credit mechanism to create employee ownership in ratios up to a 100 percent leverage buyout. Nothing has been taken away from the existing owners. However, using the ESOP, the existing owners will surrender the exclusive right to acquire more ownership in the company and have a smaller percentage of ownership in the total company, but they have not been prevented from making a fair rate of return on their thus-far accumulated ownership shares because the company earns a rate of return throughout the process. After the loan has been paid off with pre-tax earnings, the employees will have more earnings from capital and they will have more consumer power to purchase products and services. Multiply this by tens of thousands of employee-owned companies and the economy revs up to grow dramatically.
There are now over 11,000 profitable ESOP companies, of which 1,500 of those companies are worker majority owned, with workers paying for their stock shares out of future corporate profits, not by reducing their take-home labor worker incomes.
