Did you know CalCom Energy is an employee-owned business?
In 2018 the company began an Employee Stock Ownership Plan (ESOP), which is a Trust set up by the company with assets that benefit employees and their beneficiaries. The Trust owns 100% of CalCom’s stock shares and vests those shares to employees during their tenure. CalCom Energy is one of only ~7,000 functioning ESOPs in the United States.
How has CalCom Energy benefited from the ESOP
• Switching to an ESOP has prompted CalCom to make necessary improvements in driving the value of the business. As the business grows, the employees do as well.
• With roughly 50 employees vested in the ESOP, team members have gained a higher level of visibility into the basis of decisions and financial position of the company.
• The CalCom ESOP Communications Committee offers employees a front row seat to understanding the positive impacts, operations, and current valuation of the ESOP.
• Knowledge is happiness. As the ESOP structure has allowed colleagues more visibility into their company, CalCom has achieved a more stable financial and cultural environment. CalCom employees are more invested in the success of the business, instilling in them a driving motivation to achieve the corporate goals that they directly shape.
Additional ESOP Facts
• ESOP companies are 7.3 times less likely to lay off employees than conventionally owned businesses, indicating job security and low turnover.
• According to Rutgers University’s School of Management and Labor Relations, during the pandemic employee-owned companies performed better in retaining jobs for workers than non employee-owned companies.
• An ESOP provides fair value market for the selling shareholder. Assets held by ESOPs are tax-deferred retirement funds like any 401(k). Research by the Department of Labor shows that ESOPs have higher rates of return than 401(k) plans and are also less volatile.