Since 2013, Sargent has been 100% owned by our employees.
ESOP stands for Employee Stock Ownership Plan. It’s a kind of employee benefit plan known as a defined contribution plan, similar in some ways to a profit-sharing plan. To establish the ESOP, the company created a trust to which it contributes either new or existing shares of company stock (and/or cash to buy stock). Each participant in the ESOP has an account which is primarily invested in company stock, so each participant has a beneficial ownership interest in the company as an indirect owner. Generally, employees are eligible to participate in the ESOP after six months and 1,000 hours of service. Allocations are made annually on the basis of relative pay.
When Employee-Owners leave the company, they receive their stock, which the company must buy back from them at its fair market value. Sargent has an annual outside valuation to determine the price of the company’s shares.
The reason we set up an ESOP is to provide financial continuity for the company while at the same time providing a long-term financial benefit to our Employee-Owners. As Employee-Owners, we share financially in the success of the company, but more than that, we share in the pride of a job well done and the camaraderie of working toward a common goal that benefits everyone in the company. The benefits our people receive from our ESOP depend on their safety, quality of work, and execution, as well as how long they’ve worked for Sargent.
The value of these benefits depends primarily on the amount the company contributes annually to the ESOP, as well as how much the company’s stock value increases or decreases during the individual’s employment with Sargent. As Employee-Owners accumulate seniority with the company, they acquire an increasing right to the shares in their account, a process known as vesting. Employee-Owners are 100% vested in six years. The longer an Employee-Owner remains with the company, the greater their interest in the ESOP becomes.
There is no cost to Employee-Owners to participate. While ownership is primarily a financial benefit, just as with other stock ownership programs, an ESOP is different. That’s because our people affect the share value by the positive (or negative) value we bring to each project each day. When the company does well, our Employee-Owners do well. We all have some “skin in the game,” as they say.
Employee quotes on ESOP & Being an Employee Owner:
"Employee-Owners are like family ~ there for you in good times and bad. Living United!"
"For years I prompted myself and others to treat the resources of the company like they were our own – that mindset leads to making the best decisions for the company. When we became an ESOP, it became much easier to convey that mindset and we, the employee-owners, benefit directly."
"I think becoming an employee-owned company has been a huge benefit to myself and everyone else within Sargent Corporation. Over the past few years, I have seen an increase in employee motivation which has produced higher profitability and increased revenue. It’s a great feeling."
"As an employee-owner I am part of the Sargent family. And when it comes to crunch time, we are definitely a united team!"
"The ESOP means longevity and security. I'm glad Herb did it."