ESOP

At 20/20 Plumbing & Heating, Inc., we know that being an ESOP company comes with many benefits to our company and employees. 

You may be wondering, What is an ESOP? An ESOP, or employee stock ownership plan, is an employee benefit plan that allows employees to own part or all of the company they work for through the issuance of stock based upon the duration of their employment.

Here are five of the advantages of being an ESOP:

1. Attracting and Keeping Top Talent

It is well-documented fact that engaged and satisfied employees work more productively, produce higher quality work and have longer employment tenures. The opportunity to own a share of a company and have a secure retirement plan is a big enticement for top talent seeking new job opportunities.

According to a 2018 analysis of National Longitudinal Survey data of workers aged 28-34, the median tenure of an ESOP employee is 46% greater than a non-employee owner (5.1 years versus 3.5 years). Soft benefits such as a sense of belonging and pride of ownership are often cited as reasons for remaining with an ESOP, and such values transcend racial, gender and income lines. 

2. Employee Empowerment

In an ownership culture, the company’s success is also the workers’ success. With a financial stake in the business comes pride of ownership and a desire to boost its productivity, growth and profitability. Overall morale and trust in the company also increases, contributing to a culture of workplace collaboration and employee development.

3. Tax Advantages

ESOP structures offer multiple tax advantages for both the company and employees. If the company is a C-corporation, contributions made to ESOPs are tax-deductible. If it is an S-corporation, the portion owned by the ESOP is tax-exempt. Similar to a standard retirement account, employees are not taxed on the contributions received and only have to pay tax on the ESOP when they withdraw money after retiring. In addition, stock contributions and those used to repay ESOP loans are also are tax-deductible.

4. Succession Planning for Owners

The tradition of passing down a family business is not as common as it used to be. In recent years, ESOPs have become an increasingly popular succession planning option for small and family-owned businesses. Rather than selling their company to a third party, ESOP owners can leave it in the hands for their employees. Further, owners who wish to remain involved with the business for a period of time may contribute their shares to the ESOP over time rather than all at once.

5. Consistent Governance

When circumstances change and an owner steps back from their business, an ESOP ensures that there will be no disruption to the company. It will maintain longterm relationships with clients, distributors and suppliers, while also retaining management and employees. Consistent employee ownership means brand stability in the marketplace and job security for employees.

If you’re looking for employment with greater stability and work satisfaction, consider joining our ESOP family. We are proud to be a thriving 100% employee-owned ESOP, where employee ownership drives a forward-thinking culture and self-sustaining profitability.

As a leading plumbing and HVAC contractor in California and Nevada since 2015, increasing demand for our services means that we are always on the lookout for team members who share our uncompromising standards of ethics, professionalism, accountability and customer service. Check out the many exciting career opportunities 20/20 has to offer, and apply today!