The Cross Employee Owner Committee, CEOC, thought it would be educational and interesting to share with you some ESOP statistics comparing Cross Company to other companies with ESOP’s.
- ESOPs exist in both large and small companies, but the majority of ESOPs have less than 250 employees. The largest ESOPs are Publix Super Markets with 145,000 participants and Procter and Gamble with 40,000 participants. Cross Company has 166 active participants (27 new participants). In 1997, a survey of the State of Washington shows that ESOP participants made 5-12% more in wages and almost 3x the retirement assets as workers in comparable non-ESOP companies.
- There are approximately 12,000 ESOPs in place in the U.S. (3,000 are 100% employee owned) covering 11 million employees who draw in excess of 3% of their total compensation from ESOP contributions (numbers through 2014). Cross Company became 100% owned by the ESOP in 2006 and since then the average benefit rate has been11.3% of compensation. Countrywide, ESOP employees now control 8% of corporate equity.
- At least 70% of ESOP companies are or were leveraged, meaning they used borrowed funds to acquire the employer securities held by the ESOP trustee. Cross Company utilized a company loan to the ESOP to buy the ~40% of shares the ESOP did not own in 2006, which moved Cross to 100% ownership. This loan was set up for 20 year amortization (payback) and has 9 more years to go with a little over 5,900 shares to be released over that period from collateral to employee accounts.
- An overwhelming majority of ESOP companies have other retirement and/or savings plans, such as defined benefit pension plans or 401 (k) plans, to supplement their ESOP. Cross Company does have a 401k plan which associates can supplement their retirement funds with their own contribution deferrals. There has been no ‘company match’ to 401k, but it still offers associates a valuable way to defer a portion of their salary in a tax deferred vehicle until retirement. Currently, when associates diversify their shares from ESOP, the funds are rolled over into their 401k plan. The combination of 401k and ESOP as a retirement vehicle provide a valuable way to plan for your retirement financial needs.
Cross Company was in good financial shape when the ESOP was created and the condition of the Company has been excellent since then. Through knowledge and facts shared from CEOC, we hope you feel as proud to work within such a great company as we do!