Wausau Supply’s expansion that will bring the company’s Weston footprint to one million square feet, and it’s done by being completely employee owned.
Wausau Supply CEO Jody Maier says being an employee-owned company has helped it weather the recession and gives employees a bigger stake in the company’s success.
Work is underway in the Weston industrial park area to build a 133,000-square-foot facility that will bring Wausau Supply’s footprint in that village to 1 million square feet.
And this expansion is happening at a time when the 70-year-old company is now completely employee-owned, says CEO Jody Maier.
While the number of employee-owned companies—those operating under Employee Stock Ownership Plans, or ESOP—has been decreasing, the number of employees involved is on the rise, according to the National Center for Employee Ownership.
In 2002, there were 8,874 ESOPs in the U.S. That dropped to 6,717 by 2014. But in that same time, the number of employees who were part of ESOPs grew from just over 10 million to more than 14 million. The growth coincides with the recession and its recovery.
Only about 30% of ESOP companies are fully employee owned, as Wausau Supply is. And considering there are approximately 18 million companies in the U.S. that employ other people, according to data from the federal Small Business Administration, that makes ESOPs pretty rare. Only 188 such companies operate in Wisconsin; and only 26 of those have more employees than Wausau Supply, says Patrick Mirza of The ESOP Association.
ESOPs even got the attention of U.S. Sen. Tammy Baldwin, who last year introduced legislation called the Worker Owned Wealth Act aimed at encouraging more employee-owned companies.
For Wausau Supply, which furnishes contractors and retailers with building supplies such as siding, the Great Recession that began in 2007 was more like a depression, Maier says. The once 650-employee company dropped to about 350 as building projects dried up and contractors were hard up for work. Now those jobs are back and the company is ready to hire more.
Part of the expansion is due to the company adding new products. While once Wausau Supply only resold materials for contractors, the company now also manufactures enhanced products, such as Diamond Kote® Siding, and faux barn-board panels created with 3D imaging. It has 17 warehouses and facilities across nine states.
The road to becoming employee-owned wasn’t a short one, Maier says. Wausau Supply, which was privately owned since 1947, began the process in 2001, when the owners decided to divest themselves in order to retire. It became 100% employee-owned in 2016, Maier says.
Wausau Supply now is recruiting for more employees to match the expansion. Being an ESOP makes that interesting, Maier says. Employees accrue shares of the company as they work after one year. This essentially becomse like a retirement plan. When the employee leaves the company, either through retirement or otherwise, the company buys back the shares. The former employee then could roll that payout into a retirement plan.
This kind of benefit can be a tough sell when recruiting, since an employee won’t see it until they retire or leave the company. But being invested in the company encourages employees to work better, because they know they’re working for themselves. The more profit the company generates, the more valuable the shares, and the better the payout will be. That ownership in the company’s success, Maier says, “brings out the best in people.”