A recent Chicago Sun Times article outlined how Menke client Clark-Devon Hardware, a well-established hardware store based in Chicago, has taken a significant step towards empowering its workforce and securing its future by implementing an Employee Stock Ownership Plan (ESOP). By transitioning to employee ownership, Clark-Devon Hardware aims to create a stronger sense of commitment and engagement among its employees. This move not only benefits their employees, but also ensures the long-term success and sustainability of the 99 year-old business. The decision to adopt an ESOP reflects the company’s dedication to fostering a positive work culture and building a thriving hardware industry.
Many see ESOPs as attractive for small to mid-sized firms that have strong cash flow, a good management team and ownership that wants to exit while preserving their company’s culture.
One of the key advantages of an ESOP is that it allows employees to have a vested interest in the company’s success. This sense of ownership motivates employees to perform at their best, fostering a collaborative and productive work environment. Studies have shown that companies with employee ownership experience higher levels of job satisfaction, increased productivity, and greater employee retention rates.
For the Walchaks, it’s a way to bow out while ensuring continuity of a business they’ve run for 50 years, picking up from their father and grandfather. It’s as if the workers have become the fourth-generation owners.
“The great thing is that employees are getting ownership at no cost to them,” Ken Walchak said.
Clark-Devon Hardware’s adoption of an ESOP not only benefits its employees but also has potential implications for the hardware industry as a whole. The move highlights a progressive approach to business ownership, emphasizing the importance of valuing and investing in the workforce.
The article quotes Matt Nels, managing director at Menke & Associates, who handled the Clark-Devon transaction, “It’s not a solution for every business, but it should be on the table as an alternative. There are a lot of baby boomers with companies out there who are looking to retire.”
