Hutchens becomes completely employee-owned
Phil and Valarie Hutchens reveal the transition to an ESOP for Hutchens Construction Company at a company-wide meeting on March 5.
March 16, 2016
Charlea Estes
Hutchens Construction of Cassville announced last week that they had transitioned into becoming a 100 percent employee-owned company by forming an Employee Stock Ownership Plan (ESOP).
Owners Phil and Valarie Hutchens announced their decision as a surprise at a company-wide meeting on March 5. While Phil will stay on as president of the company, they feel that the switch to being truly employee-owned will be good for the employees and the business as a whole.
Reasons for the decision tied mostly to employee benefit and control without the possibility of losing the company to an outside buyer. Hutchens said their reasons were to preserve the company legacy and retain employees, allow employees to benefit directly from company success, attracting and retaining employees, motivation for improvement of quality, productivity and customer satisfaction, as well as meaningful retirement benefits for long-time employees and allowing the company to operate under the same management as it has been.
Hutchens has grown significantly since it’s founding in 1961. The company’s beginnings were small-scale, spraying asphalt in chicken houses and chip and sealing driveways. Today, Hutchens owns four asphalt plants and four aggregate quarries and has operations in both Missouri and Arkansas.
During the meeting, Phil told the employees, “Generating $1 in revenue by increasing sales will involve a lot of costs. At the end of the day, you might only keep a nickel. If you generate the same $1 by reducing expenses, you keep the whole $1.”
Hutchens is joining around 2,500 privately owned companies that are 100 percent ESOP. Studies reveal that ESOP companies outperform traditional privately owned companies.
The way the new ESOP will affect employees involves employees ownership stake. Each year, the company’s profits will determine how much money is allocated into each employee’s accounts. The plan is a qualified retirement plan that buys, holds and sells company stock to benefit its employees. Their earnings will be able to be cashed in upon retirement. Should an employee resign from Hutchens, the vested account balance can roll over into an IRA similar to a 401K plan.
Charlea Estes
Hutchens Construction of Cassville announced last week that they had transitioned into becoming a 100 percent employee-owned company by forming an Employee Stock Ownership Plan (ESOP).
Owners Phil and Valarie Hutchens announced their decision as a surprise at a company-wide meeting on March 5. While Phil will stay on as president of the company, they feel that the switch to being truly employee-owned will be good for the employees and the business as a whole.
Reasons for the decision tied mostly to employee benefit and control without the possibility of losing the company to an outside buyer. Hutchens said their reasons were to preserve the company legacy and retain employees, allow employees to benefit directly from company success, attracting and retaining employees, motivation for improvement of quality, productivity and customer satisfaction, as well as meaningful retirement benefits for long-time employees and allowing the company to operate under the same management as it has been.
Hutchens has grown significantly since it’s founding in 1961. The company’s beginnings were small-scale, spraying asphalt in chicken houses and chip and sealing driveways. Today, Hutchens owns four asphalt plants and four aggregate quarries and has operations in both Missouri and Arkansas.
During the meeting, Phil told the employees, “Generating $1 in revenue by increasing sales will involve a lot of costs. At the end of the day, you might only keep a nickel. If you generate the same $1 by reducing expenses, you keep the whole $1.”
Hutchens is joining around 2,500 privately owned companies that are 100 percent ESOP. Studies reveal that ESOP companies outperform traditional privately owned companies.
The way the new ESOP will affect employees involves employees ownership stake. Each year, the company’s profits will determine how much money is allocated into each employee’s accounts. The plan is a qualified retirement plan that buys, holds and sells company stock to benefit its employees. Their earnings will be able to be cashed in upon retirement. Should an employee resign from Hutchens, the vested account balance can roll over into an IRA similar to a 401K plan.