Recruit Key Leaders and Transition your Business
DST Consulting Engineers, an environmental consulting firm, implements an ESOP to recruit key leaders in the business. The ESOP proves so successful the owner expands the ESOP, and when ready to retire, uses the ESOP to transition the business to the employees.
“The ESOP was a great succession plan, it allowed me to retire earlier than I had planned.” Mike Fabius, Owner
DST Consulting Engineers was experiencing poor growth despite previous years of 20% revenue growth. The company’s owner Mike Fabius knew he needed to recruit experienced leaders to take the organization to the next level.
The owner was finding recruiting talent the traditional way—head hunters and advertisements — ineffective.
Mike realized ownership could be a competitive advantage and hired ESOP Builders to implement a plan.
How we Helped
Using our ESOP Transformation Model, we worked with the owner and key staff to create a plan that was considered fair to everyone. This involved creating a team of employees who helped design the plan. The process took time and required a number of meetings to get everyone on board.
Part of the reason for the longer process was the owner had previously asked a lawyer to draw up a stock option plan. The stock option plan favoured the owner and as a result, employee trust needed to be regained.
- The ESOP experienced slow uptake for the first three years while people became comfortable with the plan and began to see returns.
- After that DST has seen 40% ROI for past 10 years
- Share value increase from $0.25 to $5.40
- Employees increased from 40 to 140, one third of whom have become owners
- ESOP provided owner with exit strategy