Today’s episode of the AEC Leadership Today podcast features Alex Moss, Founder and President of Praxis Consulting Group. Alex is an expert in ESOPs—Employee Stock Ownership Plans—and we go deep into their history, their applicability, their mechanics, and their benefits so we can know much more about all of our options for ownership as we move forward.
Understanding and Excelling with ESOPs in AEC
What if there was an ownership structure designed specifically to create more capitalists, and in so doing create more opportunities for more people to increase their wealth through performance and incentives, and with no guarantees?
Such a structure does exist: It’s an ESOP, an Employee Stock Ownership Plan – something most of us have heard about, but don’t really understand – even those of us involved with ownership succession planning.
Alex is an expert in and an advocate for ESOPs, but he is not a “seller” of them – so he’s a perfect guest for us to learn more about ESOPs, and their ability to drive greater business results and create more opportunities for greater individual and collective wealth… but only when the fit is right.
We’re always better served when we better understand all of our options – so let’s learn more about ESOPs.
“…ESOPs have higher productivity growth, they have higher employee retention, they have higher retirement benefits…higher return on equity and sales growth and…lower levels of lay-offs during periods of economic uncertainty.”
– Alex Moss
In this episode, we discuss:
- Alex’s background in economic development, how he became an advocate for ESOPs, and the history of ESOPs – a very American concept going back hundreds of years, well before the current version’s inception in 1974.
- What an ESOP is and how it differs from other benefit plans like a 401K.
- The advantages and disadvantages of ESOPs from the perspective of current and next-generation owners, employees, and clients.
- When ESOPs can be a “fit” and when they may not in terms of ownership transition.
- What partial ESOPs look like and the advantages and disadvantages compared to becoming a 100% ESOP.
- How ESOPs perform compared to other types of companies.
- The mechanics of setting up an ESOP, and what size organizations it may be most applicable for.
- How ESOPs participate and often fare in the merger and acquisition (M&A) markets.
- The types of leadership and management approaches that work best within ESOPs, and the best practices in terms of operations and incentivizing results.
- Why a good ESOP may be the “single most valuable thing you’ll ever own”.
- The role ESOPs may play moving forward as the industry continues to consolidate, and the supportive nature of the ‘ESOP community’.
“I’m going to argue that more inclusive management is better, not just because it’s nice, but because it gets better results.”
– Alex Moss
I’m grateful to have had Alex on the podcast to share his knowledge on ESOPs, how we can excel with them, and the benefits they can provide when managed properly. I hope you found our conversation as valuable and as insightful as I did, and that you’re now better informed about what options may work best for you and your firm moving forward.
Thanks for listening to the AEC Leadership Today Podcast!
I sincerely hope you enjoyed today’s episode. Be sure to contact Alex to learn more about his work and ESOPs. If you like what you heard, leave a review on iTunes and share the podcast with your friends and colleagues. Look forward to seeing you in the next episode!
Resources Mentioned in This Episode
- Praxis Consulting Group Website
- Get in touch with Alex: [email protected]
Employee Ownership support organizations:
- www.esopinfo.org
- www.esopassociation.org
- www.nceo.org
- www.employeeownershipfoundation.org
- www.esca.us