October was a month filled with excitement for SCJ Alliance employees and President/CEO Jean Carr. “I was privileged to announce to our employees that SCJ is now a 100% employee-owned company,” Jean shared. “Being a 100% employee-owned company is a way for our founders and previous owners to reward our employees for their dedication and commitment, as well as preserve our unique culture.”
The decision to establish an Employee Stock Ownership Plan & Trust (ESOP) was a natural evolution, according to Jean. Under the plan, all eligible employees earn a yearly allocation of stock and the stock value increases as the value of the firm increases. The ESOP allocates stock to employees in the form of a retirement benefit similar to a 401(k) plan.
Longtime SCJ employee and Centralia office principal, Brandon Johnson, shared his enthusiasm for the change. “In a company where we already have an award-winning culture and a staff full of fun, motivated, engaged and innovative people, transitioning to an employee-owned company was a no brainer,” he said.
ESOPs are most often implemented by shareholders who would rather see their company continue with employees as the new owners, rather than selling to a competitor or private equity group, and that was the case for SCJ.
“We’ve been working on transitioning to an ESOP for the past few years and I’m very happy this has become a reality,” Jean said.
Congress created ESOPs to make it possible to transfer ownership to employees and has given firms that establish them special tax advantages. These tax advantages enable employees to become shareholders at no cost to themselves.
There are about 7,000 ESOPs in the United States.