July 7, 2023

Menke Client Clark-Devon Hardware Highlighted in Chicago Sun Times

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.

Clark Devon Employee Owners

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.”

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In 2024, many companies are looking for ways to minimize corporate taxes and maximize cash preservation, while also maintaining competitive employee benefits. Other companies are looking for ways to create liquidity for shareholders who wish to retire or reduce their ownership stake.

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Among the topics that will be covered are the following:

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    • What benefits can ESOPs provide for shareholders of S corporations?
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October 23, 2024
Join us for a free, 90-minute web seminar on Wednesday, November 20th, 2024, where industry experts will guide you through the essential benefits of ESOPs. You’ll learn how ESOPs can be structured to meet your specific business needs, ensuring the sustainability and success of your company in 2024 and beyond.