With the graying of America, many businesses are looking towards what comes next. Nationwide founders, creators, officers and owners are researching transition options as retirement age approaches.
For SCJ Alliance , the choice was clear, though not exactly simple. They decided to keep the business in the family, so to speak, by becoming 100 percent employee owned, which required a two-year journey to create an Employee Stock Ownership Plan and Trust (ESOP).
At SCJ Alliance, they employ just over 100 people and have 8 offices across Washington State and 1 in Boulder Colorado. They have extensive expertise in engineering, transportation, cable transit, landscape architecture, and planning. To plan for their own future, they’ve spent the last few years putting the pieces in place to become employee owned.
“Employee ownership can be accomplished in a variety of ways,” explains the National Center for Employee Ownership (NCEO). “An ESOP is a kind of employee benefit plan, similar in some ways to a profit-sharing plan. In an ESOP, a company sets up a trust fund, into which it contributes new shares of its own stock or cash to buy existing shares…Shares in the trust are allocated to individual employee accounts.”
“It’s a very complex process,” admits Jean Carr, SCJ’s president, CEO, and co-founder. “We took our time to make sure we were doing it in a way that worked for our firm and our employees. Getting to this point though, says Carr, involved three federal regulatory agencies and the hiring of an outside ESOP trustee. The process also included external valuators, multiple attorneys, and plenty of red tape.
“Even in the early days when we started SCJ Alliance, we looked to the future. We love what we’ve built and we love and value our staff. It was important to us to be able to reward everybody for their dedication and commitment, as well as preserve our unique culture.”