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Summary of Podcast on EP28 - NCEO Book Launch: “Ownership: Reinventing Companies, Capitalism, and Who Owns What” - Interview with Corey Rosen - The Grid Wiki

EP28 - NCEO Book Launch: “Ownership: Reinventing Companies, Capitalism, and Who Owns What” - Interview with Corey Rosen

Journey to an ESOP & Beyond

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| September 27, 2022

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When should a business owner start succession planning?What advice do business owners who sold to third parties have to offer me?Will all of my employees become owners if I sell the business to them?

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The ESOP Guy interviews Corey Rosen the founder of the NCEO to discuss Corey’s new book on how ESOPs have the best chance to solve a multitude of issues in the US - notably the wealth gap. Corey and I discuss the book as we go through the outline of his book “Ownership: Reinventing Companies, Capitalism, and Who Owns What”

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[0:12] Hey welcome everybody this is the ESOP guy and if you are listening this podcast than you are on a journey to a nice,  so so happy that you guys could join us today if it's your very first podcast or first episode that you're listening I wanted to say Welcome to our podcast,  we have developed this as a resource to really help people when they start thinking about Employee Stock ownership plans about how they work and how they might work for for your business,  and so with all of that we've done with this is our third season of podcasting and we've got,  a website dedicated to really kind of focusing in on this topic so you can go to our website at journey to an ESOP.com and find out more about other topics that,  that really might interest you if you're if you're thinking about an employee stock ownership plan.    [1:00] So as we as we go into this episode today I'm super excited because it's a topic that I do think is very important,  because it's much bigger than just the esops that we're going to talk a lot about the economy about wealth inequality,  and to do that we're going to get to explore a recently written book called ownership Reinventing company's capitalism and who owns what.    [1:25] By Corey Rosen and,  we're going to go into really just kind of the overview of the book but really tied down and connect that the concept beat behind,  how esops really are a great solution for a lot of things a lot of times we get we get really discussing the issues related to the selling shareholders,  but but this is the other side this is the side for how it really benefits employees and then bigger than that though how it benefits,  the communities that we live in how it benefits our society how it benefits the economy in general and just kind of where we're going with the economy as well so,  some I'm excited I'm excited to do that and to end to really explore this book really well we're going to end up getting to interview,  today the author of this book Corey Rosen so with all of that Corey I wanted to kind of just welcome you to the podcast,  in let you kind of just speak for a few minutes just kind of introduce yourself in terms of how you got into Aesop's and kind of the,  Catalyst that Drew you to this this type of work that you're doing today.    [2:33] First fell thanks very much for having me and thanks to all the people who were watching.    [2:40] So my name is Corey Rosen and I'm the founder of the national Center for employee ownership hopefully I'll know who we are but you don't just go to National Center for employee ownership,  on the web and you will see who we are if you're not a member well that's an easy sin to fix it's right you can go to our website and take care of that there too,  you know we are the main source of information about employee ownership we have over 50 book titles we do weekly webinars and Community conversations,  we do a conference we do our fall form that's coming up in a few weeks so I have lots and lots of really great resources.  And by the way if you're a member my favorite one is our document Library which has greatly expanded which has a lot of critical things to make your ESOP run more smoothly.    [3:36] I came to this idea a long time ago in 1978.  I was a senate staffer and I read this testimony in the Congressional Record,  by very famous sociologist named William White.  And actually knew who he was even more because he was at Cornell and I've done my graduate work at Cornell.  And he gave this testimony about this idea of employee ownership which I'd never heard of before and I thought that's really interesting.  Here's this idea he was saying where the employees could own the companies that they worked for,  and those companies probably would be more productive the employees would end up.  More eventual retirement assets communities would do better and then there was this interesting thing called an ESOP.    [4:37] Was something that allowed the owners of the companies who would share ownership with employees to do better to that almost seemed unreal that everybody wins yeah not that many things in life where everybody wins.  The more I looked into it the more I thought that that really is the case.  I was always you know I was in my 20s and so I was always looking for a cause to fight.    [5:06] And when I read about this I thought this is really a great practical idea it works.  And it has political support from both sides and that was unusual even then.  So I thought you know to change the world make it a better place altruism is a great thing and we should all try to strive for that.  But altruism and felt lousy vehicle for large-scale social change if you can link people self-interest to something good for everybody You've Really Got A Winner so I was hooked.    [5:45] I've continued to work on it I got involved in legislation the most important of the things I got involved in was I drafted what is now section 1042,  convince my bosses to introduce that and continued to nag people about it for the ensuing four years.  Until it was passed in 1984.    [6:11] And I also started the center because I thought this is a great idea.  But very few people know about it we don't know whether it works that well we don't have good research on this.  We don't have a way for people to find resources all of that sort of thing and so I'll start an organization to do that and.  And here we are we've grown we're now about 19 employees,  19 employees and Garrett I mean and I kind of failed to talk about that in your intro just because I wanted to focus on the book but,  starting this nceo I mean for those that don't know about the NCO it is a very vibrant organization and they do so much good in the ESOP Community because they're bringing people together constantly,  to educate and that and this is what this podcast is all about and this is what Cory's book is all about is providing a resource,  did you ever think that the NCO would be this this big when you started it I mean that's a pretty major accomplishment in life when you think about it yeah no yeah yeah,  the first three years I didn't even get paid so I was wondering if we get started at all yeah I decide you like to put food on the table,  yeah and one of our board members who would own denisov companies that don't worry Cory the first 20 years of the.  So I was just hoping that we could.  Be a large enough organization to be self-sustaining which was our goal in which we are and.    [7:40] To provide good jobs for a handful of people promoting so I never envisioned we get this this big but it's been a great journey yeah and then the 10:42 thing I just,  I think it's awesome to be able to actually talk to you because like that's everybody's using this you know and on the C corporation tax to capital gains tax deferral,  said to have the vision a draft that and get it and be so instrumental in getting it approved I'm Eve you've done a lot for Aesop's I mean bottom line,  obviously it's your passion and you've kind of dedicated your life to it right.    [8:15] Definitely yeah so so this what was what was the in terms of I know when you write a book you probably are like look I need to I need to say something,  that hasn't really been said before I need to re say something that needs to be said what was your inspiration to write the book.    [8:33] So the books actually co-authored by me and John case John is that a best-selling business author that I've known,  since the early 1980s he wrote a book called open book management amongst.  Other books and John as a terrific guy and a friend and a wonderful writer and he sent me an email and he said you know I think I've got one more book left in me,  and I'd love to expand the way we talk about employee ownership,  to show it's not just a useful thing for company owners who are looking to move on or it's not just that an intervention that will help in this part of the economy or that part of the economy it really is something that should be,  and can be Central to making capitalism work and indeed,  saving capitalism from its own problems that we're seeing increasingly not just in the US but around the world.  M that to be my little more grandiose that really threatened democracy.  We started off with a somewhat more modest view but as we started working with our publisher berrett-koehler.    [9:52] Which itself is employee-owned and was a publisher unlike any publisher we've had in that they spent a lot of time with us,  talking about let's see where we can go with this idea let's see how broad we can make the arguments here and it really helped us to think beyond the initial conceptualization of the book.  So it was always a partnership between me and John and eventually berrett-koehler as well.  Yeah and I think good things are Partnerships and I forgot to mention John to so I apologize for that at the very front end again super excited so I'm just jumping right into the something so but thanks for you know explaining that,  now as we start off I think the biggest thing is you know we all live in different places in the US,  and I think we're in not just geographically in some cases we live in different places as far as,  you know economically and sometimes we just don't understand like people in the news is difficult to because you have so much political bias with the news,  how would you explain for for the kind of common person to say hey are layman's terms like what is what does it mean to have a wealth Gap you know as far as wealth inequality goes,  and then like how do we know that we have one and it's growing to be a growing social issue that we have in the country.    [11:13] Right so for some people the wealth inequality we have and really every industrialized country has.  Is just the inevitable consequence of capitalism it's a trade-off,  you kind of have to make that if you're going to have a highly productive efficient economy you're going to have a lot of inequality and I think there's some real substance to that argument.  But the.  Thing that doesn't have real substance is that there's nothing you can do about it and still have an efficient economy and employee ownership,  says yeah there is that if you divide up ownership amongst more people,  the pie actually gets a lot bigger for everybody there was the Real Genius of Aesop's then not about taking money away from anybody,  the not about you know taxing the rich to redistribute to somebody else that they're giving people who are well-off tax incentives.  So it's something that is in people self-interest to do.  The consequences of this wealth Gap are significant the first is.  That about half the population says that it can't put its hands on a thousand dollars in an emergency.    [12:39] Fifty percent of the private sector Workforce is in no retirement plan at all.  Which means the median retirement assets of an American worker for a privately for a private company is zero.    [12:57] This causes this tremendous wealth insecurity reverberates and all sorts of ways it means people.  Have a harder time sending their kids to college paying for medical bills unexpectedly that come up having a Secure Retirement buying a home.  And I think on top of that just having that tremendous insecurity.  This is something that really a Rhodes you psychologically and physically.    [13:30] The last thing that that does is it creates a pervasive sense of unfairness.    [13:37] The feeling that this system is rigged against me.  And people have different solutions and look for different white Knights to solve their problem,  but that feeling of unfairness is historically.  Then one of the key underpinnings of the movement from democracy to autocracy and we're certainly seeing this happening in a lot of countries around the world.    [14:05] So there's a lot of problems that this creates and.  You have one group of people saying all the answer to that is fewer taxes and less regulation.  And another group of people saying the answer to that is higher taxes and more Regis tribution in the various social programs.  I have my own preferences around those things but that doesn't matter for this purpose because what we argue in the book is whatever you think about those two things neither one's going very far politically.    [14:42] Because there is such entrenched opposition to to whatever you're proposing whereas employee ownership is an idea a that works.  And be that as politically practical.  And that rather than saying it's you guys versus you guys it's let's all do this together.  Yeah so it's like the the some of the some of the things you said are really good and I think people don't like I said they don't realize it as much on a larger scale,  but what we're talking about is there is a political,  problem in this country where we don't have to be you know rocket scientist to understand like we're so polarized in certain ways nothing's going to get done,  and it is coming back to the idea of what's the sustainability of the United States itself you know and what we've done as a country that.    [15:36] Hasn't been done before you know and so I think I think it's kind of,  a wonderful connection between like how how does this really help the country in such a way where politics is failing the country even though this is a political invention,  politics itself are failing so I love I love that this Gina because it's a big big picture and then it's not only just a big picture it's something that we focus on with one company at a time you know for a nice.  Which you know what at the well my why is this issue more relevant now than it was 20 years ago or 40 years ago.  And the answer is that if you go back to say the 1970s half the workforce was in manufacturing.    [16:26] If the non-governmental Workforce anyway people could make a secure living often with just one wage earner.  With relatives a medium level skilled jobs that was a realistic aspiration.  And what Lewis can also be inventor of Aesop's argued going back to the 50s is that as we went forward over the next generation or two.    [16:53] Wages are going to stagnate and returns to Capital going to soar because the work that people do.  But at least the skilled work that people do and increasingly be replaced by Machinery he didn't Envision in the 1950s how it would be replaced by technology or the globalization,  that would push wages down even further so wages ended up stagnating the median wage in real dollars today is slightly below what it was in 1973.  At the same time people's real costs of increased Health Care has grown faster than the cost of inflation,  college education certainly has grown faster than that,  it's a lot of you know we didn't have cable television and cell phones to pay for then so these are all added expenses.  And yet we're making the same amount of money.  I'm trying to provide for a retirement at the same time and it's just not working for a lot of people but what happened to the people who own capital.  Well they did quite well and real dollars.    [18:09] Ownership value grow at 8% per year since the 1970s remember the Dow had three digits then,  you now have an economy of our 32 percent of the wealth productive wealth,  this is held by less than 1% of the population and three families own more wealth than 50 per than 90% of the rest of the families.  That's a big there's a big gap obviously with a nail you said there the trends are there and inflation now it's worse to because inflation is so much higher and that's right trying to just keep Pace even out of the last 12 months and has been just.  Very you know difficult thing to comprehend as far as where do we go next,  so so kind of that's the that's the wealth inequality issue as we as we kind of summarize it so as you start your book one of the things you ask is like what's wrong with what we have and you go into this idea of who owns,  these companies,  talk a little bit about that idea of why is this such a critical question to ask like who owns the businesses because it's obviously we're connecting that concept with the the issue the social issue of wealth inequality.    [19:25] Right so we in this country we've focused when we think about economic inequality we focused on income and not on welfare.    [19:35] Then we argue we need to do we certainly need to focus on well.    [19:41] And so let's look at how wealth is owned right now and there there's three primary ways that productive assets are out so we're talking about companies.  It says public companies there's companies owned by private equity and there's individually owned or family-owned businesses.  Public companies that we used to think well that's ownership.    [20:06] It's a very peculiar kind of ownership isn't it for most of us ownership of stock in public companies is equivalent to betting on a horse that a race track.  We're not really investing in the horse we win at the horse wins.  But we're going to move that money out of there as soon as possible if we think there's a better investment we're not providing the company Capital to grow.    [20:33] And then there's the Pension funds and mutual funds and other institutional owners.  And these owners most of their trades are done algorithmically which means that the stock is typically held for a fraction of a second.  That's a very peculiar kind of ownership isn't it yeah so the notion that Wall Street is owned by people Israeli misguided.  Wall Street's a giant Casino.    [21:03] And the money that people put into these companies if you look at where their financing actually comes from very little of it is from Equity raise.    [21:14] So how about companies are great in that give people a place to invest but because of the way their own.  There's a tremendous pressure on the CEOs of these companies to look for quarter to quarter earnings or less,  and the typical CEO has a tenure of less than 5 years.  So there's very little incentive in these companies to think about Investments for the long term particularly investments in people.  The first reaction of a troubled public company has to lay people off,  I daresay the last the first reaction of an ESOP company is not the lay people off the last thing you want to do not just because you're good folks,  but because you know when things get better you're going to be in a lot better shape than your competitors if you've got a trained Workforce ready to go and the data bear you out on that,  certain kind of ownership is private Equity about twenty percent of the workforce it's been estimated works for companies owned by private equity and some private Equity firms are actually embracing,  at least a modest form of employee ownership so that's a step but most private Equity firms aren't,  and even in the ones that are the vast majority of the benefit goes to a tiny number of people.    [22:39] Private Equity firms have a longer time Horizon typically three to seven years and public company CEOs but still pretty short and their goal is to maximize profits and flip the company and often that means,  reducing labor costs and reducing people.    [22:56] The third form of ownership is family-owned businesses individually owned businesses,  and these have tremendous advantages for society and communities.    [23:08] But eventually pretty much all those companies are going to be sold and when they're sold they might be sold to some big competitor,  public company perhaps they might be sold to private Equity so they go out of that model hm get none of these models.  Provide a realistic way for ordinary workers to accumulate substantial ownership.  Now they could if they could put aside enough money into their 401K plans to build really substantial assets.  But the reality is if as we discussed people's wages are stagnant and their needs are growing it's harder and harder.  To do that and most people say they live paycheck to paycheck so putting that extra money aside is really hard.    [24:04] So the the only other way I've seen it as if you work for that company and they sell and then they pay some high-level people that aren't necessarily owners,  you know x amount of the deal but but like you're absolutely right there's no there's no way and we know that like the you said that the third form everybody eventually will sell which is part of,  also the relevancy of this topic because we're seeing this concept of I don't know who coined this phrase the silver tsunami but we're starting to see that I know I'm seeing it and you probably are seeing it in the you know the bigger picture of the nceo,  so we know that we're at the beginning of a major transition of ownership right now you know in the next five to ten years it's going to be really interesting,  so that really Paints the picture for the ownership as we as we start thinking about that,  the issue of wealth inequality and then the way the ownership is how do how do we  change things so this is kind of the next part of your book like how do we actually make a difference with the obviously we're getting to the ESOP being the primary solution but so let's walk through that a little bit.    [25:10] So the reason that we focus on Aesop's and we do talk about other ideas I'll mention some of them but the reason we focus on.  Is twofold one is the politically practical there's a lot of books.    [25:27] That end with a chapter on what next after a devastating analysis of all the problems of whatever it is.  And this is one of the one of the area's you know how do we deal with this tremendous economic and security and they say well if I ran the world it would be the table and.  Almost invariably that's great if you do but there ain't no chance that you're going to.  So it's not there you know we didn't want to have some pie-in-the-sky notion,  of what can we do if we will the world we wanted a notion of what realistically can be done there's a phrase I love coming from Steven Johnson the science writer,  and it's my favorite phrase for any kind of innovation and change whether it's a strategic change in your company or larger social change called the adjacent possible.  Adjacent possible is that thing which is different enough to really move you forward but not so different.  That it's just too long a journey and too much of a risk to try to get there and employee ownership is a great example of an adjacent possible.  It's something we already know is doing exactly what it claimed to do.  Participants in Aesop's have about three times the retirement assets their laid off about 1/3 to 1/5 as much.    [26:53] Voluntary turnover as much lower and the companies perform better so we know this does what it claims to do we also know that many more companies.    [27:05] Would be Aesop's if we really just made some tweaks and assistant so we talked about for instance providing creating State programs.    [27:17] To encourage more employee ownership simply through education and Outreach because most business owners don't have a clue,  what this is or they're told by their advisors it's not a good idea because their advisors don't want to sell to Anissa because they don't know how to do it that's right that's right they might make more money selling to somebody else.  So getting more education out there at the local level would really help and it wouldn't cost that much California just passed a law.  To start this process for instance then it passed both houses unanimously imagine that yeah,  there's a Bill in Congress now has a very good chance of passing the workout which I wrote 35 years ago,  for a Tennessee senator the now actually may become law how well not a persist I guess yes and that would create State funding for these State programs all over the country.  Solving some of the finance problems it would you know a lot of Sellers and certainly you know this film,  a lot of sellers who I really like these up and I got to do a seller note if I want to sell the whole company least for part of the transaction you know I actually like the money now right so.    [28:35] Finding ways to solve that funding Gap with public support,  is eminently doable we do it with lots of other federal and state loan guarantee programs and there's a concept now been proposed that would expand those programs to employee ownership.  So there are these kind of small tweaks that could be made,  but equally important I think would be employing our ships and idea that gets a lot of political Pat's on the head that's nice these are cute companies look like they're doing isn't that swell right let's go on to serious conversations right.  Employee ownership needs to be a serious conversation that is a prominent part.  Of political discussions that wouldn't cost anything they might even get your votes certainly wouldn't cost you any buns.    [29:28] So you know I did a podcast last week with a right-wing conservative Network.  And I'm going to do a podcast later today with the American Social business venture Network Okay the third as far apart as you get for sure both really liked the idea so it's a practical,  step it's not going to solve every problem but it's a really important step and there are other ideas like.  I'll just mention one we mentioned several platform cooperatives imagine that instead of Uber or Lyft.  Being owned by a small number of people and started by Venture Capital but that's software.  Had been developed in a way that it was usable by drivers themselves.    [30:21] And so the platform the technology is owned by the drivers and there actually are some instances now this getting underway.  There are ways to make that happen with relatively small public Investments.    [30:39] And so that's another way that you could get for instance gig workers to be on there.  Yeah I would just add to the discussion on this because I think from my perspective and what I what I'm what I see is part of the issue that you haven't touched on yet.    [30:55] Is I think the actual cost of Aesop's is very confusing to people and,  there's a lot of when I talk to new companies about Aesop's there's a lot of confusion and sense of like,  who does this and who does that in to me the cost of the ESOP needs to because because advisers are charging just dramatically different,  you know rate doing this so because of that you know you might talk to somebody,  and they say well it's going to cost this and you might talk to somebody else in there like how can they both be right if they're so different yeah and I think part of its the industry has not caught up,  you know from an from an economic model you know with with I think part of the barrier to entry may be a part part of the lack of Education,  but I like my own role is so significantly different than and the way in Investment Banking firm would put together an ESOP deal so so I think that's right that's going to be part of part of that and I think I but I absolutely agree with you I mean all that,  all the support that a political system which is,  bipartisan agreement which Aesop's have you know supporting new esops is going to be important I think the community of advisors between CPAs attorneys,  Bankers Insurance people they all have to understand better Aesop's and and that's that takes time.    [32:20] I think your ride if there were many more advisors in this field the cost would come down.  Yeah and I also think you're right that part of the reason the cost.    [32:31] Sometimes appear to be so high are so high is that the people doing these transactions,  are using the model they would use say we're going to sell you to somebody these off might be one so we get a success fee.  And that adds a lot of cost and sometimes that's really Justified and other times the owners absolutely certain they're going to sell to an ESOP.  Yeah there's there's a reason for that in those transactions yeah I think it's just because they've been able to do it I mean when I tell people like what does an ESOP transaction,  it is it an m&a transaction but it's a regulated m&a transaction which is distinctly different than a regular m&a transaction where if I'm going to bring in a buyer from wherever you know and Source a buyer that's that's traditionally what you get paid is successfully for.    [33:25] We all know we already have the buyer which is the trustee program you know and I talked to a business broker once and he said so what can I charge.  As a success fee for telling my client they could do a Nissan.  Myself are something charge very much and he said I can't do this again so yeah it would be great for my client but it's not good for me,  so I'm not going to tell them yeah and that's in that thinking I think we'll that's a dead end anyways if your if your business professional and you're doing whatever you're doing,  and you're not really there to help people but your have to get something I think in the end you're in a dead-end you know and I know at the bottom line is if,  I know I don't always tell people you're the ESOP is right for them I mean because there could be the based on their goals and objectives they should go a different direction my job is to help them and that's our job really to do to do what we're doing,  if we do that well then everybody wins in the end but so Aesop's though because you know if you think about it and this is this is something I think is just a clarifying point,  because a lot of people on this podcast are so brand new to esops,  some of the basic questions I get is like how how does the employee actually benefit some people think the employees actually buying the stock which is not true so when we when we just give some foundational understanding of,  what an input an ESOP is it's a retirement plan.    [34:50] Where the people continued to work in their jobs that they had before and by doing that they're going to earn shares of stock over a period of time typically a longer period of time,  so what would you add to that I just want to make sure that the benefit of an ESOP is connected.  Taken thousands many thousands of calls over the last 47 years.  And so I thought I got reasonably good at explaining how an ESOP work but I realized early on.  That I would tell people how they work in the first thing I would say is that you have to understand the employees don't buy the shares.  Cover the whole explanation at the end it's a core that was great I understand everything you just explain to me when do the employees by the shoes  you know I'm sure that that experience too oh yeah oh yeah just really just baked into people's conception yeah there's a different way to think about this.  And so I tell so's concept was let's imagine that a private Equity Firm wants to buy a company most of the time.  What they do is they borrow money.  To buy the company and they pay it back out of the future earnings because why would you buy a company think you could do that mhm.    [36:08] So one of the employees who know more about the company than the private Equity Firm and have a lot more reason to make it succeed.    [36:16] Why can't the employees do the same thing well because they don't have collateral.    [36:22] And so solving that problem was simply saying let's find a way for the employees as the group.  To have access to Collateral so that their company can borrow money to buy the shares and the employees in the future.  Well as you say felt they will work for the company earn the profits to pay off that loan.    [36:48] So you earn it through the work that you do.  Then it's a really simple concept when you boil it down to that yet and so the trick was how do you get the existing owners,  to be willing to put up the collateral I already own so the employees could become the owners,  of course the answer was that great American solution to all problems provide a tax incentive.  And that works in the works and it works and the truth is.    [37:21] I'm sure this is true of most maybe all of the people listening to this it isn't just the money it isn't just the tax benefits.  In fact when I talk to people the most resonant concept about employee ownership.  Is this is my legacy work my whole life to build this company these people help me build it I'm rooted in this community.    [37:48] And if I transfer this ownership to the employees and see them thrive.  What a wonderful way to end my business career what,  wonderful thing to be proud of and it is it really is and that's and I totally agree with you the tax,  tax I'd get you so far gets people interested and talking about it I can't tell you how many esops I've done where,  you know it's not it's not the majority but there's several that you get surprised like the owners like look that's enough like we've we've negotiated for a market value,  you know and we could get more you know not more than fair market value but,  the number that they want is less than in your like I know we could get to this and they're like no I don't want to strap the company because they truly care about about the sustainability of this company and the employees being able to be successful they don't want to strap them with too much debt,  and that's that's what's unusual and honestly what's what you know I love about this business is because you're dealing with people that do truly care about other people,  you know I heard our keynote or once he said how many people go through their lives answering the question what do I want to be remembered for.    [38:58] As I want to be remembered as someone who's really rich a few people or I had this huge house or these fancy cars.  Most people have it what I want to be remembered for the something I did for my family my community my colleagues for the larger society.  And you know I'm 73 and when I think about what I want to be remembered for.  I want people to say you know he made the world a better place that would be.  That would be heaven to be able to think that's how people remember me and I mean I got imagine that that's already true right now Corey cuz like just two things we talked about,  the fact that you've dedicated your life to this and you saw the concept being so helpful so I think you've already hit that goal you know.  The question is like how long do you mean 73 do you want to keep doing what you're doing you probably love it so much you don't want to stop I'm going to imagine ever yeah yeah as long as I can.  Be useful to the organization in the idea I will do it I haven't gotten paid for this job for 11 years now.  And 11 hits.    [40:13] Samantha extraordinary blessing I wake up everyday literally thinking I am so fortunate to be in this community with these people doing this kind of work it's,  it's just extraordinary I love it yeah that's great,  well let's let's talk about capitalism that's so easy to finish the book we talk you talk about capitalism and we think about Reinventing capitalism for the 21st century,  what do you mean by that you know in terms of what the future holds assuming esops are continually successful in doing more and more of those.  So you can if you can imagine an economy in which most working people,  whether it's through Aesop's or worker coops or employee ownership trusts or private Equity firms that grant them Equity as part of a deal or platform coops.  Or  Broader ideas like Sovereign wealth funds like the Alaska Sovereign wealth fund that provides everyone with a dividend based on the oil there.  There are Maybe Baby bonds.    [41:25] In one way or another or maybe multiple ways everybody has a meaningful ownership stake in the economy.    [41:34] That would be a really different world where people would.  CV system of capitalism as a lot more fear I think it would increase,  people's buy into society overall the other thing we talked a little bit about in the book is Within These companies.  That employees typical structures employees are involved in a lot of decisions about how their work is done because that's what makes these companies really work best.    [42:08] But when you're doing that you're working for a common purpose because we're all owners here.  And now you're sitting across the table around a group of chairs talking to people from all different backgrounds,  all different levels in the company often and everybody's an owner and everybody can can have a say and is valued for their input.  That creates a level of social Trust.  But we really lost and society and hopefully this will help people replicate that so I think there's a lot to be hopeful for,  in the way this can transform the economy and people's eyes.    [42:51] No I totally agree what I love about esops to and you've to you fit on this but the people stay in their jobs,  you know with with people with turn over what we don't think about a lot of times is if somebody starts working for a company and then they jump to another company in the jump to another company.  And for them they never really experienced the fruit of building a career in a company,  that individually can be not you know just super satisfying if you're at the right place right not that they shouldn't or you know there's a lot of reasons people move on to different employment but,  the other side of it is the community itself like if these companies get bought by a private equity and then they close the shop down and they move everything to a different state you know the community loses those jobs and a lot of times the.  So and then you think about the these companies that are valuable and their Innovative in you kind of lose all of that,  you know because a spreadsheet with financials and different numbers and planning isn't the company it's just a representation of what the value is at the point in time.    [43:57] Plate of the the real value of companies is the combination of the leadership and the people,  that gets cuddly wiped out you know you so the customers lose that the the employees lose that the community loses that so that's one of the things I love about esops is it retains that,  for for everybody for a long period of time which makes our country better it makes our communities better it gives people better jobs than they would have otherwise you know,  well said yeah so those are things I think are important when I think about capitalism I think it's a,  um it's a great it's a great opportunity I think you nailed at the beginning and obviously there's a cost every every system whether it be communism Socialism or capitalism there's going to be a cost to those systems and and I think we're seeing that as we kind of,  come back to the the beginning of what we started with so from from the perspective of somebody,  looking at this book what would you what would you guide them if they're looking for a resource as far as y to pick up your book.    [45:00] Well hopefully this puts employee ownership in a broader context it's not a how to do an ESOP work we have lots of books yeah we do we do,  they're they're written entirely by me off and so they're not nearly as good as this one is a great co-author to work with.    [45:21] The but this book tries to place it in the broader context we've been talking about.  And we're hoping that this is a book that people will share with their colleagues at work because I think.  Reading this book gives people a sense that they're part of a larger Enterprise and that's really important.  So I hope people will buy this and give it at some companies already are - to give out to their Communications committee or give out to lots of people in the company,  and I definitely hope people by give it to their state legislator he killed her give me either.  Funded or person you might want to try to influence.  The California build is to give you an example the California Bill happened because one of our members.    [46:13] Call the state senator the at an acquaintance with.  And said hey this is really a good idea maybe it's something you should sponsor the state center say I like that idea.  Who should I talk to so a group of us got together in response to that.  And we had a series of meetings crafted a bill and it passed that's crazy it was no wobbling yeah there was no vast,  fundraising and whatever.  You can do that in your state go talk to the legislator about creating a state program we can help you with that,  yeah I love that I think it just like that's the that's how the political system should work you know people should want to get involved,  and whatever ideas that they might have be able to do that but to have a success story like that is is exciting to be able to do that and that's how 10:42 happened,  the owner of a local company said look I've excelled at John Deere for their stock and not pay any tax to I sell John Deere stock mhm I don't care I'd rather sell to the ESOP and pay more taxes because it's important to me.    [47:23] But the next guy who does this shouldn't have to do this.  And I said that's a really good idea we should do that yeah and that was the lobbying effort behind 1042 so we tend to think of politics is this,  the most impenetrable Fortress,  unless you've got lots of money and lots of political thought and that's true for some issues of course but it isn't true for this one fortunately,  now that's very that's very good well let me just say this about the book is called ownership Reinventing companies capitalism and who owns what bike or Rosen and John case,  I will put a link to that book on my website at journey to nice up.com,  you can go in and nceo website as well and you're going to find that so we wanted to definitely get that resource out to you to know about it and I think that's really important,  I got this quote I wanted to finish with the book to read is not the one that thinks for you but the one which makes you think by Harper Lee,  so I just thought that was it an appropriate quote for us today and check out the nceo as well and you know,  because we want to help you guys do Aesop's more ESOP so appreciate you today Corey and everything you brought from the podcast and thank you really appreciate it felt was fun great,  so with all that we will see you guys on our next step on this journey to a Nissan.

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About Journey to an ESOP & Beyond

ESOPs are gaining traction. In the "Journey to an ESOP & Beyond” podcast, Phillip Hayes explains the process of the ESOP transaction and addresses ESOPs from a business owner’s perspective. The "ESOP Guy" illuminates the simplicity of ESOPs as he debunks common misconceptions that ESOPs are immensely costly and complicated.

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