Chesterton Tribune

 

 

Urschel workers get ownership stake

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The 400 employees of Urschel Laboratories now have an ownership stake in the company and a say in the business.

On Thursday, President and CEO Rick Urschel announced that, under a new Employee Stock Ownership Plan (ESOP), stock shares will be allocated to employee accounts, on an annual basis and without any out-of-pocket cost to the individual employee. Then, on their retirement, employees will sell those shares back to the ESOP for cash.

That ownership stake “also gives the employees control over future transfer of the company, making it difficult to sell or merge with another company,” Urschel Labs said in a statement released on Thursday.

Although the move has been nearly a year in the making, it’s only been in the last few weeks that company shareholders began tendering their stake to the ESOP, the statement added.

“There are many reasons why a company would want to convert to an ESOP,” Urschel Labs said. “In the case of Urschel, the uncertainty of the ability or willingness of the fifth generation to run the business caused them to start exploring options. It quickly became clear that conversion to an ESOP was fair for the company, the shareholders, and the employees.”

President and CEO Urschel did say that the ESOP has not been implemented as an exit strategy for the current owners. “I’m not sure how many years my dad has left to work but everyone appreciates having him around. He’s a great source for institutional knowledge, and I rely on his council. As for me, I love living here and couldn’t think of anywhere else I’d rather work. I’ve grown up with a lot of these guys, and the friendships I’ve had over the years make coming to work and doing the best job I can an easy task.”

Board Chair Bob Urschel, for his part, said that the ESOP is another way to continue the company’s tradition of protecting employee interests.

“I know it sounds trite but we really feel our employees are our number one asset. My father always taught me that it was the family’s job to look out for the employee, and decisions should always be made with them at the forefront.”

Started in 1910 by William Urschel, Urschel Labs has become the global leader in food cutting technology. Still owned four generations later by the Urschel family, it has direct sales offices in Europe, Asia, and South America, so that “almost everyone enjoys a product prepared with assistance of Urschel machinery,” the company said.

Rick Urschel expressed the hope that the new ESOP will add to the company’s regional reputation as a desirable place to work. “We have a top-notch health insurance plan,” he said, “a generous 401(k) and Deferred Compensation plan, excellent above-market wages, and an annual performance-based bonus. I think the addition of the ESOP to the benefits package just makes us that much more attractive as a place for someone to build their career.”

“This decision was not an easy one to come by, and has been in the works for nearly a year,” Rick Urschel added. “I am grateful that the shareholders of the company were able to realize what an incredible benefit this would be for the employees, and what a wonderful way we can reward them for their years of dedicated service. Now, instead of the Urschel family being the stewards of the company, we have passed that obligation on to the employees. Today, we’re all part of the same family.”

Rick Urschel did tell the Chesterton Tribune today that the ESOP should have a minimal impact, if any at all, on corporate governance. “While the structure of the board did change in this transaction, the governance is still controlled by a majority of Urschel family members,” he said. “This transaction should have not have any effect on board decisions.”

More important, Rick Urschel emphasized, giving employees a stake in the company also gives them, in a very real sense, a tangible stake in Chesterton. “This transaction instills the company’s commitment to the community to a deeper level,” he said. “There would have been no guarantee that in the future, if the company were sold to another entity, that the Chesterton location would have remained open. Now the legacy of the company rests in the hands of the employees.”

Jeff Trout, a member of the Chesterton Redevelopment Commission and a key official in the negotiations which led to the company’s decision to relocate to Coffee Creek Center, applauded Thursday’s announcement of the ESOP. “Bob and Rick Urschel have built a solid management team that shares the values and commitment to hard work that has made Urschel Laboratories a world-class company,” Trout told the Chesterton Tribune today. “The sale of the business to their dedicated employees will only strengthen the company going forward. I have had the privilege to work with some of these team leaders and congratulate them all for taking on this great responsibility to grow and strengthen the company brand.”

 

 

Posted 3/4/2016

 
 
 
 

 

 

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