An Employee Stock Ownership Plan (ESOP) is an employee benefit plan designed to convert company ownership into shares that are distributed among employees. ESOPs were given a statutory framework in 1974 and are governed by ERISA (Employee Retirement Income Security Act). In ALTA’s case, shares are provided to full-time employees at no cost. There are more than 10,000 ESOPs in the United States, covering approximately 10% of private-sector employees. The largest and most well-known example of these companies is Publix Supermarkets.
Why did ALTA become an ESOP?
When ALTA’s owners and founders were looking to retire, they were not willing to sell the company to a larger language services provider, which would risk employee jobs and livelihoods. They found an alternative in an ESOP plan. Roughly two-thirds of ESOPs are formed for this same reason; owners of privately-held, profitable companies convert their businesses into ESOPs to allow themselves to depart from the business while keeping employees’ jobs and the vision of the company intact. ALTA’s founders currently serve on the Board of Directors and continue to provide guidance for the company.
How does this impact the company?
Even before becoming an ESOP, ALTA has always embraced the mantra: “Think like an owner.” With the formation of ALTA’s ESOP, every full-time employee at ALTA has a highly-vested interest in the outcome of everything we do at ALTA. Studies indicate that ESOPs outperform traditionally-owned companies in several dimensions, including annual growth, sales margins, employee retirement funds, and productivity.
Setting the studies aside for a minute, we hope this means you will see our dedication to quality and customer service in every aspect of working with our company, from answering the phone, to project management, scheduling and billing. We all want to see our company succeed.
More information on ESOPs: