Blue Ridge ESOP Associates Industry News

March ESOP Madness:  Ready to Make the Most of Your Annual Participant Statements?

Posted by Blue Ridge ESOP Associates

Mar 13, 2018 4:12:22 PM

JBado March Madness.jpg

The following article has been provided to Blue Ridge ESOP Associates, courtesy of Workplace Development.  It’s time to sharpen your pencil and fill out your March Madness bracket. While we can offer no assistance on the NCAA Tournament – our brackets will be ruined at the end of day one too – we can help you with another important event:  your annual ESOP statement distribution process. Here are six suggestions to make the most of this great opportunity to communicate your plan’s benefits, engage employees as owners and build your ESOP culture.

1) Develop a communications goal
As Legendary Basketball Coach John Wooden once said, “The most important key to achieving great success is to decide upon your goal and launch, get started, take action, move.”

What’s your goal for the annual ESOP statement distribution process? Communicate that the ESOP is an important benefit for participants and the company? Increase employee appreciation and retention? Connect people’s daily activities to company success and ESOP stock value? Build a common understanding of the roles and responsibilities of employee owners? Something else or a combination of these? Like Coach Wooden advises, decide what your goal is and take action.

2) Communicate the rules of the “ESOP game”
Without an understanding of basketball’s rules, the NCAA tournament will bore you to tears. The same holds true for your ESOP:  people need to know how it operates to be active players in the game of ownership. Being a player means understanding your ESOP’s TIONs (shuns).

a) How you join the plan – ParticipaTION
b) What our company puts in each year – ContribuTION
c) What you receive as a participant – AllocaTION
d) What your account is worth – ValuaTION
e) When you get your ESOP money – DistribuTION

Remember to focus on your plan’s specifics and avoid generic ESOP explanations. Along the way, share how vesting works because it’s really another shun (RetenTION).

3) Use a “dummy” or sample statement to show the score
Knowing the score is an essential part of watching the NCAA tournament. Your statement shows people the “score” of their ESOP account. Utilize a “dummy” or sample statement in your communications to teach employee owners the score. When you discuss the company’s 2017 contribution, you can point to that line on the dummy statement. Or, as you describe the rules for vesting, you can highlight the sample participant’s vesting percentage on the dummy statement (and the forfeitures line to illustrate what happens to unvested shares).

4) Share stats to illustrate what drove stock value
NCAA fans dig into the stats to understand how their team won or lost. Do the same by sharing trends, customer examples and business events that affected stock value in 2017. Like the diagram illustrates, pick things that employees drive in their daily jobs like customer service, product and service quality and improved cash flow. Use concrete, specific examples to show how employees’ actions impact the company, the ESOP and the numbers on their ESOP statements.

5) Give employee owners a game programJBado March Madness #2.jpg
If you’re fortunate enough to attend an NCAA Tournament game, you’ll probably buy a program. Blue Ridge’s ESOP equivalent is a colorful, written or electronic, customized “how-to-read our statement” handout.  This handout contains boxes, arrows and short descriptions that illustrate how to read and understand your ESOP statement. Employees will refer to the sample when they look at their own statement. Even better, they will share it with their spouses (some of whom, let’s be honest, are more interested in your company’s benefits than employee owners). When an employee considers leaving your business for 25 cents an hour more at another firm, an informed spouse will ask whether the new company has “one of them ESOP things”. 

6) Have fun and celebrate employee ownership
People celebrate the exciting, unpredictable nature of the NCAA Tournament. Receiving a participant statement should be a celebration of employee ownership at your business. The ESOP benefit, after all, is an important reason why people work at your company and put in the extra effort to make the business even more successful. There are many ways to add some fun to your festivities. Examples include passing out a piece of the pie, handing everyone a Payday or $100,000 candy bar, getting a scoop of ice cream or playing a game (like Guess Our New Stock Value or ESOP Jeopardy) to reinforce your goals and ownership message.

Just like March Madness gets everyone excited about college basketball, your ESOP statements are a great opportunity to communicate your plan’s benefits, build enthusiasm for ESOP ownership and enhance your company’s ownership culture.

Blue Ridge ESOP Associates has customized presentations, written and electronic ESOP education materials designed for effective, successful statement communications. Please contact Blue Ridge ESOP Associates 434-979-5500 if you’d like to discuss how Blue Ridge can help you make the most of your annual statements.