I’ll never understand why there aren’t more AV companies with employee stock ownership plans. [related]
AVI Systems serves as the primary–perhaps lone–example of an ESOP now the Unified Technology Systems is part of the Solutionz, Inc. family.
I know private equity is all the rage these days, especially in the biggest AV mergers and acquisitions in recent memory, but ESOPs are the way to go if your ultimate goal is not to just make money, but to also build employee loyalty and pride in your brand.
If you don’t believe me, maybe you’ll take it from Dallas Mavericks billionaire owner and everyone’s favorite Shark, Mark Cuban.
“Even if it’s a small private company that may never grow big, if you’re a dry cleaner, share,” Cuban said in a recent interview with LinkedIn editor in chief Dan Roth. “Your employees will work harder. They’ll recognize that they’re an owner.
“They’ll have a completely different perspective—and that benefits everybody,” he said.
I know there’s not a lot of hiring going on across the AV industry these days, but imagine the appeal of your offer compared to others in the space if you could include company ownership.
It took me almost 25 yeas into my professional career to become a company owner, but I jumped at the chance when Emerald offered it to us shortly after they acquired EH Media. Sure, there are plenty of ups and downs when you’re dealing with stocks, but I think it’s the coolest perk I’ve ever been offered.
I think most employees would agree the opportunity to have a stake—and a voice—in the company is definitely a worthwhile investment. I’m certainly not at the level where I have an equal voice to some of the major Emerald stakeholders, but just knowing I’m an owner is pretty cool to me.
More About Employee Ownership
While there are certainly examples of employees who work for years at the same company without any ownership stake in the business, ESOPs also tend to have more examples of employees who spend most or all of their careers in one place.
Some of the employees who’ve worked for companies involved in the recent AV mega-mergers have learned that their positions aren’t always as secure as they had thought or hoped when that large sum of cash goes from one private equity firm to another and two industry powerhouses join forces.
Speaking as someone who went through the private equity churn in my previous life as a newspaper reporter, I can tell you that model is one that leaves the employees with more questions than answers in most cases, especially when it comes time for annual reviews and “there’s no money” for raises.
Surely, there are plenty of success stories on the private equity and venture capital side but the fact there’s already been a few years of interest from investors who typically move on to the next shiny object quickly should be a scary proposition for those in AV looking to cash in on their companies.
Could the absence of private equity dollars be the proverbial “new normal” in AV once we emerge from this extended economic downturn? If so, maybe this downtime is the time when you should be doing your due diligence on creating an ESOP at your company. I think you’ll be glad you did.
Billionaire Mark Cuban does too.
