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Mini-cast 51: Health, Wellness, and Shareholder Value

In Episode 51 of The ESOP Mini-cast, we discuss why an EO company’s shareholder value should mean more than just account balance. The employees’ health, wellness, and happiness are additional measures of value and EO conferences can help increase that value.

Also: Rob Zicaro's Podcast Food for Thought and we say hello to some new EO friends: New Age Industries, NCEOC, EOX, and Eagle Manufacturing Group.


Mini-cast 51 Transcript

Announcer: 00:03 Welcome to The ESOP Mini-cast. A great way to wrap up the week.

Bret Keisling: 00:13 Hello, my friends. Thanks for listening to Episode 51 of The ESOP Mini-cast. I'm Bret Keisling, and as it says on my business cards, I'm a passionate advocate for employee ownership.

Bret Keisling: 00:23 For most of my career. When I thought about shareholder value, it was from the capitalist perspective, developed in the middle of the 20th century, of maximizing shareholder value. It was generally accepted that to do this the company would slash expenses, which usually meant people, and maximize revenue. The stated purpose was to derive as much shareholder value in the form of money to the shareholders through dividends and increase in share value in the EO context, what would happen if valuation experts quantified the employee owners health and welfare and even job satisfaction and general company culture and added or subtracted value based on those factors? I'll have more about that coming up in just a bit as well as Rob Zicaro's Podcast Food for Thought, but first let's do some shout outs and congratulations.

Bret Keisling: 01:13 Our first shout out and congratulations is to New Age Industries of Pennsylvania. They recently completed a final transaction resulting in its becoming 100% employee owned. CEO Ken Baker appeared on Episode 16 of The ESOP Podcast. He's a talented business person and a great leader. He's an early adopter of employee ownership for all of the right reasons and is one of the cofounders of the Pennsylvania Center for Employee Ownership, PACEO. Ken really works really, really hard growing the EO sandbox for all of us. So congratulations to the new 100% owners of New Age Industries.

Bret Keisling: 01:51 Shout out and congratulations also to the recently launched North Carolina EOC. Big thanks and congratulations to the cofounders Anne-Claire Broughton who's acting as [interim] executive director, and the founding board members La-Tasha Best-Gaddy, Molly Hemstreet, Patrick McHugh, and Steve Storkan, who is also executive director of the Employee Ownership Expansion Network or EOX. Welcome North Carolina EOC to the EO sandbox. We're looking forward to hearing great things out of you! One of the things, by the way, in North Carolina that I love is besides their mission being growing employee ownership, generally, they're specifically targeting how to preserve minority owned businesses in the employee ownership sandbox. And I think that's really important and just great. So thank you all.

Bret Keisling: 02:41 A separate shout out and congrats to Steve Storkan, executive director of EOX. It's a nonprofit focused on seeding and supporting state centers across the country. Congrats and thanks. And NCEOC and, and EOX, we'd love to have someone come on the podcast and tell our listeners about all of your efforts.

Bret Keisling: 03:01 A final shout out and thanks to the Eagle Group Manufacturing in Michigan, they created an amazing video that celebrates its ESOP and employee owners. I love the video, including the use of multiple employee owners across all departments and their impressive longevity. I was impressed they even included five years of share values to show an eighteen percent in value increase over that period. They covered the vesting schedule, too. It's very impressive, Eagle Group. I think everybody should check out the video.

Bret Keisling: 03:30 The one thing, and I've said this before, every company needs to find its own voice in terms of open management. I'm a fan of open management but not necessarily wide open in every case. That Eagle Group was comfortable sharing their share value, I think is wonderful, but as you watch the video, just keep in mind, you're not locked into that, but boy was great. One other thing about Eagle Group, when they tweeted out, earlier this week, a blog post and the video about their ESOP, they tagged The ESOP Podcast on Twitter. If you'd like you or someone else in EO to get a shout out, tweet about it and in the post or comments tag the ESOP podcast and or add the hashtag K,E, I, S, O, P. That's #KEISOP. Here's another way you can help us amplify and celebrate employee ownership.

[Ad Break] Bret Keisling: 04:21 Are you a passionate employee, owner or advocate? Would you like to share your passion on The EO Podcast and ESOP Mini-cast? We're looking for correspondence to help us share the great stories of employee owners and their companies, in one to four minute long segments that can be recorded remotely over the internet or the telephone. If you're interested, drop us a line, you'll hear contact information at the end of this episode.

Bret Keisling: 04:46 It's time for our friend Rob Zicaro's Podcast Food for Thought. You can hear me talk about Rob and his work on last week's mini cast, Episode 50, and you can visit his website at Here's our amazing retired employee owner friend.

Rob Zicaro: 05:03 Hi, my name is Rob Zicaro. Today's food for thought: Is there a shared meaning of employee ownership within your organization? And this is an important one for me. I think this is one I would consider to be one of the building blocks of a good foundation of an ownership culture. Oftentimes we assume everyone in an employee owned company knows what employee ownership means or what it means to be an owner. But oftentimes if you dig a little deeper and you have some conversations, you realize that there's different meanings of ownership. It could be someone in management has an idea what an employee owner should be, a non-management person has a different idea. It could be a cultural background that shapes our definition of ownership. It could be our experiences. So it's very important as a foundation to build a good employee owned company and an ownership culture is to have a shared meaning of what employee ownership is.

Bret Keisling: 06:06 Thanks, Rob. So let's get back to shareholder value. With the exception of certain specifics related to ESOPs, ESOP company valuations are generally performed in the same manner as non-ESOP companies. I understand this, certainly not arguing against it. However, some of the most important issues that make ESOPs what they are, are often, if not usually, overlooked from a valuation perspective. I don't mean overlooked in the sense that the valuation expert wasn't thorough, but rather we don't have a system of best practices necessary to quantify some of the things that I'm talking about. So, for example, one of the facts about ESOPs that many of us often share is that in times of economic slowdown, ESOPs are significantly less likely to lay off staff or cut salaries. Everybody understands in the valuation field that the company has the ability to decide staffing and salary levels at any time, let alone in a downturn, certainly adding staff on when times are good.

Bret Keisling: 07:03 There is an academic discussion in the ESOP world, however, that considers whether a failure to reduce staff or salary would result in a lower share value and whether that's appropriate in an employee owned company. This is a flip side of an argument that you feel strong businesses is coming, so you add 10% additional workers. Well, if it's speculated, have you affected share value? Perhaps you have, but that doesn't make an inappropriate. This academic discussion also overlooks the positive aspects of decisions like that. For example, we assume that the ESOP company's strength during the downturn of keeping their team together and not reducing salary is going to add to a more satisfied, fulfilled workforce, increase company loyalty, and it will help the longevity of the workforce. It's easy to quantify the loss of value when you consider we could've laid off people and didn't. It's much harder to quantify the increase in value as a result of the same decision. People's job satisfaction, wanting them to stick around longer with the companies.

Bret Keisling: 08:09 We've spoken frequently on the podcast about the importance of health and wellness programs at ESOP companies. My view has been, and I repeat it now, that health and wellness programs are directly tied to the bottom line. If you have a happier well adjusted staff who likes their jobs and likes going to work, that does in fact create value. I look at it as another critical management tool and a great way to help get the best out of your workforce. An ESOP or other EO company has the ability to make health and wellbeing of the employee owners a priority and within reason that prioritization should not be looked at as an expendable perk. The reality is more and more people enter the workforce with a myriad of physical, emotional, mental health, addiction issues, chronic illnesses, et cetera, and all of those things that are in every part of society. Simple ways to help employees manage their health and wellness will result ultimately in a more profitable company. And here when I talk about their own health and wellness, physical, mental health, wellbeing, I mean in their family unit.

Bret Keisling: 09:18 So, for example, everyone understands the opioid addiction is at critical stages in the United States. Well, it's easier for us to look about what if an employee owner has an addiction. But frankly, if a talented member of your team or any member of your team has a child, a sibling, a parent, a relative, a friend, a neighbor, anyone at all who is going through an opioid or any other addiction, their job, they're not going to be focused, understandably, on how to do their jobs best at all times. If we provide tools that may help them deal, either with their own problems or help them better able to assist those in their lives.

Bret Keisling: 10:05 Another reason why programs are a good idea, the insurance companies. They offer discounts on coverage if people take classes or start or stop certain behaviors. Companies often have weight loss contests, for example. Obviously, these insurance companies promote these programs among client businesses as a way to reduce premiums. It seems to me that almost every medical premium paid also includes a loss of time at work. So if the companies, regardless of their insurers promoted the same programs leading to a healthier and happier workforce, company disruptions will be minimized., people will be able to focus better on their jobs, and I'd argue that employee owners who love their jobs more will automatically just put more into it and that will lead to an increase in value. Again, it's stuff we talk about all the time. Happier workforce, more productive, more profitable. That's why we work so much on culture.

Bret Keisling: 11:02 So how can the associations help with the conferences? It just so happens I have a suggestion and it emanates from a program that's actually taking place at The ESOP Association New England Chapter Fall Conference, which is October 10th and 11th in Springfield, Massachusetts. The presentation that I'm referring to is called "Early Learnings from the 'Recovery Friendly Workplace' Initiative." And you can Google "recovery friendly workplace initiative," but I think it's intent is covered in its name. They understand the magnitude of recovery and they want to provide opportunities for companies. Now my understanding is Hypertherm, which is a well known ESOP company, as well as Headrest, another company in New England, have implemented the recovery friendly workplace. So it's going to be a panel discussion on what the program is and how it affected the two companies that implemented it. But let me read the description, 'cause I think it's important.

Bret Keisling: 12:02 "Drug addiction has become a systemic problem in today's society and ESOP companies are not immune to the impact it can have on our workplaces. The impact can be direct (our employees) or indirect (our employees' friends and families). Join Hypertherm, Headrest, and Granite United Way as they share their experiences from implementing the Recovery Friendly Workplace initiative." This looks to create an environment of support and acceptability in the workplace for those dealing with addiction and those who are impacted by others dealing with addiction. The session will discuss safe language to use when talking with employees who are involved with recovery or actively using. We'll also discuss how to mitigate the stigma that comes from drug addiction and we'll share workplace policies and discuss how a workplace might, how, excuse me, a workplace might support an employee.

Bret Keisling: 12:53 By the way, this is available on the New England chapter's website in the program. But if you take that description and you change drug addiction to depression, which I have, or anxiety and panic attacks, which I have, or chronic illness, which is not something that I deal with, but I know employee owners who do. Any of the health and wellness matters are included in the description. You can tweak the program, but what you're looking to deal with is providing your employees tools to handle it, to assist handling it if they're the ones dealing with a certain issue, but also how to provide tools if it's someone they love or connected with that has the issue. I think this is such a great idea. I love that they're going to discuss in this session the effects of stigma and that sort of thing.

Bret Keisling: 13:57 A couple of people listening might have raised their eyebrows when I shared that I have been diagnosed with depression and anxiety. Those who know me well know it's a daily part of my life. I'll have panic attacks, I'll get depression, I'll have anxiety. By the way, I also have ADD, and for those who know me, Memorial Day 2019, I celebrated 20 and nine years of recovery from my own addictive issues. Now it's easy for me, 29 years in recovery, to talk about the effects of alcohol or drug use on an employee. I'm pretty well removed from it. But the addiction's going on today, first of all, the opioid crisis is really, really daunting. And second of all, there's an understanding that besides the alcoholic or drug addict themselves, we can no longer separate from the impact.

Bret Keisling: 14:56 So, the program "Early Learnings from the 'Recovery Friendly Workplace' Initiative," I'm going to be in attendance at that program. I'm so excited not just to hear their program, Hypertherm is just a wonderful example of employee owned company, but I'm also going to hopefully help encourage to have programs like this at other conferences. And I want to talk about what the conferences can do, couple of things I'd love to see, understanding that they don't need my advice and I don't have any authority. I'd love to see an additional track added. I know it's not easy to the conferences, that is specifically health and wellness, even if it's only one or two courses or presentations. And the reason for this, we tend to have technical tracks, professional tracks, which is the lawyers, that sort of thing. And then we take an awful lot of other stuff and lump it into culture. So board leadership, board governance, that sort of thing falls into the same thing as a program for those with chronic health issues or whatnot. To me, I'd love to see health and wellness.

Bret Keisling: 16:03 With that. I'd love a decision made that at every conference, no matter who puts it on, there will be at least two health and wellness programs at every conference. One, which I addressed a little bit earlier in the show, the effect of health and wellness on value. It only helps! The second a practical program like the lesson learnings that they're doing in New England as a way to provide both practical advice and then broad-based valuation advice.

Bret Keisling: 16:33 Folks, as always, I'm happy to share my ideas. I would love to hear feedback from you. If you have an opportunity, make sure you and attend a conference near you. The major organizations all have their calendars on their websites. Check them out if there's any feedback, you're going to get the contact information for us in just a moment.

Bret Keisling: 16:54 Folks, I hope you have a wonderful weekend. Great week ahead. Next week I'm presenting at The ESOP Association Multi-state Conference in the Poconos. It covers Pennsylvania, New York, New Jersey chapters and I'm looking forward to speaking with Joe Marx of Principal Financial and Jason Yager of Global Tax Management. And I want to wish, again, good luck to NCEO that has their Fall Conference in Salt Lake City this coming week as well. Folks, thank you very much for joining me. I'm really thrilled you did.

Bret Keisling: 17:28 There are a number of ways to contact us. First, it will help. If you remember, my name is Bret with one "t". You can email me at That's B, R, E, T at K, E, I, S, O, P dot com. You can find me on LinkedIn at Bret Keisling or the place to find me most often is on Twitter at EO underscore, B, R, E, T. Thanks to Rob Zicaro for his Podcast Food for Thought. To find out more about Rob's great songwriting and music composition, visit that's R, O, B, Z, M, U, S, I, C, dot com.

Bret Keisling: 18:07 Finally, our standard disclaimers apply. The views expressed herein are my own and don't represent those of the firms or organizations to which I belong. Nothing in the podcast should be construed as guidance or advice of any kind in any field. Mentioning an organization, advocate, or website on this podcast does not reflect an endorsement, but if you've heard your name or your group's name mentioned, I'd love to have you come on and talk about yourself. The ESOP Mini-cast is produced by The KEISOP Group. Thanks to our production team, including Third Circle, Inc. and BitsyPlus Design. Archival podcast episodes were edited and produced by Brian Keisling. The music was composed by Max Keisling, and I'm Bret Keisling. Join us on Tuesday for The EO Podcast. Have a great day.


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