Tossing cornhole, munching barbecued chicken and lining up at a free ice cream truck, the employees of Yankee Publishing Inc. were celebrating something new on a muggy Aug. 22 afternoon in Dublin: becoming owners of the company they work for. While ownership of Yankee Publishing may have been a new concept to them, it’s not to others in New Hampshire.
The 17 family owners of the 84-year-old company decided to transfer a 30% stake in the business — which publishes Yankee Magazine, The Old Farmer’s Almanac, New Hampshire Magazine and the NH Business Review, among other publications — via an employee stock ownership plan, or ESOP. It will be the 30th such plan in the state, many of them decades old and one even dating back to 1985. Nationwide, there are 1.3 million employees in 5,500 standalone ESOPs. But they are still relatively rare — only about a tenth of a percent of all businesses have them in the state and the nation.
What this exactly means to the 85 Yankee employees — besides the feeling of being an owner — won’t be known until they leave the company and cash in their ESOP shares, but in monetary terms, it could be a lot. Just take a look at the more than 5,000 other active participant-employees in the state. They owned ESOPs with assets of nearly $1 billion at the end of fiscal year 2017, according to forms their sponsors file with the IRS. That comes out to nearly $200,000 a person.
That’s not what everyone will walk away with, of course. First some plans — but not most — have some substantial liabilities, particularly when first starting out, and there are expenses to run them. The employees would have to share that with the retirees collecting payments stretched out over years. And everybody’s piece of the pie is different — it is allocated through calculating such factors as years of service and percentage of payroll. Some employees may leave before they are fully vested, and others may retire before their shares are worth very much. But payments are often substantial.
For instance, at Admix Inc., a Londonderry manufacturer that started its ESOP in 2000 and is now 100% employee-owned, most employees get payouts ranging from $40,000 to the low six figures, according to CEO Lou Beaudette. At Hypertherm, in Hanover, the ESOP’s total assets top $500 million. Even when accounting for the debt, and including retirees, it comes out to nearly $300,000 per person. And the employees, like all participants in ESOPs, won’t have to pay a penny for it.