Nashville, Tenn.-based Comfort Supply is set to become a worker-owned company with the implementation of its new employee stock ownership plan.
Comfort Supply President Clay Blevins said an ESOP was the next logical step toward his goal of creating an ownership culture within his company.
“We’ve devoted time and resources the past few years to educate our employees about what a ‘profit’ is, what a ‘cost’ is, how the company makes money and how the company grows,” Blevins said. “The ESOP will let them apply those lessons and take a greater interest in the growth and value of the company. I wanted to give them an ownership perspective.”
The Comfort Supply ESOP is a defined contribution employee benefit plan that allows employees to become owners of stock in the company. In the ESOP, Comfort Supply sets up a trust fund into which it contributes new shares of its own stock or cash to buy existing shares. The ESOP can also borrow money to buy new or existing shares, with the company making cash contributions to the ESOP to allow it to repay the loan. Shares in the trust are allocated to individual employee accounts as part of participating employees’ salaries.
“The Comfort Supply ESOP is a very egalitarian retirement plan shared by employees,” Blevins said. “It will spread the benefits to a wider base of people.”
Comfort Supply is one among an increasing number of small, privately held companies opting to share ownership among employees. The company cited a recent New York Times editorial that estimated more than 13 million Americans have become worker-owners at roughly 11,500 employee-owned companies, 6 million more than belong to private sector unions.
“One of my goals was for Comfort Supply employees to take an increased interest in the growth and value of the company beyond the short term,” Blevins said. “The ESOP is a retirement savings plan that encourages daily engagement and commitment to our ultimate goal of growing the business.”
Blevins says the change to an ESOP has been met with an incredibly positive response.
“Our people are eager to become more vested with the company,” he said.
Comfort Supply district manager Billy Jobe says the plan is a powerful motivator, as the growth of the ESOP is dependent on the success of the company and all of its employees.
“I’m very excited about Comfort Supply’s transition to an ESOP,” Jobe said. “We as employees are eager to play an even more active role in the development and success of the business, and the ESOP is a concrete reminder that we all share responsibility for the company’s - and each other’s - success.”
Comfort Supply creates employee stock plan
July 1, 2012