Alloy Engineering, founded in 1943 in a Rocky River home, fabricates alloy parts for high-temperature and corrosive-resistant industrial applications. It also boasts Ohio’s first Employee Stock Ownership Plan, or ESOP, established in 1974. The plan is recognized as the first for an Ohio company by the Ohio Employee Ownership Center (OEOC). At 45 years old, it’s also the long- est-running ESOP in the state.

“Today, the company is 100% owned by 100% of eligible employees,” said Lee Watson, Alloy’s president and CEO. “Every employee is eligible to be in the plan after one year of service; they’re vested fully after three years of employment.”

Rather than resting on its laurels, the 75-year-old company, with annual revenue between $25 million and $30 million, is taking old-school values and an old-school work ethic to new heights by further concentrating on the well-being of its almost 100 employees.

Watson said the company’s purpose is to provide exceptional customer service as well as long-term financial security for its employee-owners. “That’s a major shift from where the company was,” he said. “There’s more of a concern today to make sure the ESOP is working. We have competitive wages, job security, a 401(k) giving employees a second retirement plan, excellent health benefits and we share profits monthly, annually and long-term. We have an open-book management style and share financials with the employees.

“We are a company in transition and we value our employees’ feedback,” added Watson. “Today, we have an EO Council — it used to be called the Culture Committee — and we have quarterly surveys that invite everyone to bring up any concerns. After five quarterly surveys, we’ve listened and have implemented many changes, including on topics of compensation and scheduling.”

He explained that the ESOP works as a retirement or pension plan. “We’re governed by ERISA regulations (The Employee Retirement Income Security Act of 1974) just like every other retirement plan,” he said. “A percent of payroll goes into the ESOP Trust every year and that’s how the benefit accumulates. They invest it in company stock and go through an annual evaluation because we are privately owned. The shares in the trust appreciate.”

Read the rest of the article at Crain’s Cleveland Business