Why did I sell my family’s company to employees for over a century?

When I turned 60, when I became my business in 35 years as president and CEO of Stockwell Elastomeric, I began to seriously think about the future of my family since my great grandfather founded in 1919.

We built a successful business in Philadelphia, grew into three buildings, employing over 100 workers in the city, providing custom silicon gaskets to our customers both near and far. Over the years, I have dodged inquiries from almost everyone, including competitors, suppliers, private equity companies, strategic companies. One competitor asked them to place their signed checks on the table and fill in the number. I declined.

However, by 2014 it was clear that we would not be able to lead Stockwell forever and we needed to find a solution to celebrate the efforts and contributions of the men and women on the production floor that have made us successful. We thought about what would happen to employees if they sold to strategic buyers or private equity companies for the highest dollar, moved factories and stuck the employee who made it possible to sell them. It happens all the time. I know some of the original business owners who did it and I’ve come to regret the decision. I was not planning on becoming one of the owners who had been holding top dollar while putting my people at risk.

ESOP Options

When I started to consider options, I heard what was called an employee’s stock ownership plan, or a qualified retirement plan that allows a company to share ownership with that worker. I was featured by Ken Baker, who owns and operates the New Age Industry, a model ESOP company in the area. We had lunch and I was intrigued. I went to several ESOP meetings and wanted to learn as much as I could. I met the CEO of Harpoon Brewery. HarpoonBrewery took advantage of a transaction that uses ESOP to acquire partners.

I started in 2017 with my toes in water and moving my company to 30% ESOP. The idea was to ultimately reach 100%, but I wanted to give up control of the company and make sure I wanted to do everything I could to ensure that I stayed in Philadelphia and that the employees would continue to own it permanently. I know that it will be a great word forever. How can you actually predict what will happen for decades? My goal was to set up the company to be successful as long as possible.

I’ve spoken to many experts and finally I’ve been convinced there is a model that makes it almost impossible for a company to be sold to a third party. Last year, 45% of employees owned in 2021 went up to 100%.

Employees take ownership

When I first told the employees, I was planning on resigning them and selling the company, so it took me a while to sink for them. “Does Bill sell us business? What’s wrong?” There was a bit of a mystery about that. They had never heard of ESOP. It was exciting, but it took time and repeated communication, making everyone realize what it means to them.

I have made the ESOP decisions for employees like Mike Cisco, a production engineering expert who ensures that our production processes are followed correctly. He focuses on details that have emerged in Stockwell for nearly 40 years. It is the people who have been with the company for over 30 years that people like Mike thought they had made the company a success and thought of Stockwell’s future.

For me, it was an easy decision. I felt that it would have been easy if I could be very involved with the production floor with our people and provide them with opportunities. As a business owner, you don’t need the last nickel. We must be open to sharing some of our wealth.

I firmly believe that the regularity of good work with good wages is the foundation of a good life. In Stockwell, we are proud to hire from our Philadelphia neighborhoods and make a difference in their lives. And by moving to 100% of our employees, we hope to come here and make a difference over the next few decades.

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This story was originally introduced Fortune.com