When last I wrote in this space, way back in February, I told of how I was starting to begin to really feel like an owner of the company. It had been over 3 years since DISTek founder, Matt Dickinson, decided to share a part of his company with his employees by forming an ESOP – an Employee Stock Ownership Plan. Yet none of us were handed a new job description with the title “owner,” but that’s what we are now – employee owners. And as each year passes, more information and knowledge about this whole ownership thing comes before us.
In July there was a party at all DISTek offices – we affectionately referred to it as the Reveal Party. It was here that we learned what the new stock price for DISTek was for the end of the 2017 calendar year. You see, unlike stocks traded on Wall Street, our value is determined and set annually at the end of the year – after all the financials are done, after taxes are filed, and after a rather extensive review of the company is conducted by a third party expert.
With people gathered, music playing, food and drink being consumed, cameras shared from all remote offices, at exactly 4:15pm the new price was revealed and all the DISTek employee owners immediately saw the value of their stock increased by 44%! Wow! Just like that. 44 percent! Really?! My financial planner always tells me to be real happy with 6% to 10% growth. He can’t invest in DISTek, but I can. And so can the other lucky employee owners that every day carry out their work and continue to make DISTek a strong and valuable investment.
That certainly was a good day at DISTek, and I hope we have many more like that. But I’m not naive, our value may not improve like this every year, in fact, it may decline in some years. In early September I was fortunate to attend the ESOP Association Midwest Conference in Chicago with 6 other DISTek employee owners. We fanned out over the course of 2 days, attending a wide variety of breakout sessions, learning about ESOP topics ranging from ownership culture to acquisition strategies, ESOP celebrations to tax reform, and legal issues to accounting practices. One session even showed a graph of their companies’ stock performance over a period of time. And sure enough, there were some down years. ESOP’s are not immune to economic swings and factors such as acquisitions or financial investments in capital purchases or inventory or physical space, all of these can put downward pressure on a company’s stock value. Having employee owners with a shared focused on the future success of the company, as most ESOP employee owners are, is key to making gains in future years.
Today, the DISTek ESOP owns 30% of the company. Plans are currently underway to potentially conduct a sale of more of the company to the DISTek ESOP, maybe even the remaining 70%. And when that happens, again, there will be another value boost for employee owners. No additional job description entries, no new responsibilities, no title change. Just continuing to work hard, work smart, stay focused, and share the outcome of our efforts. Remember, at DISTek, you don’t just work here, you’re an owner.
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