Glen Arm, Maryland based SUN Automation announced the 20th anniversary of its Employee Stock Ownership Plan (ESOP), an employee benefit plan that enables employees to own part or all of the company they work for.
Since SUN established its ESOP in 2003, 100 percent of the company’s stock has been allocated to its employees as a qualified retirement plan. As partial owners of the company, SUN’s employees have a vested interest in the success of the company.
“With the ESOP, we are all working towards a mutual goal,” said David President, Eastern Region Territory Manager at SUN. “When the company does well, we all benefit.”
To jumpstart the undertaking, SUN took on large loans which the company expected to pay off in 20 years. Due to the rapid growth and success of the company, SUN was able to clear its debt in 2013, just 10 years after establishing the ESOP.
“It was a huge achievement to pay off the loans so quickly,” said Steve Clarke, Vice President of Finance at SUN. “With the ESOP, payments that would have other wise gone towards government taxes now go directly to our retired employees.”
Despite all of the upsides of ESOPs, it can be difficult for employees to realize the benefits.
“You can’t see it or put your hands on it,” said Dawn Marmaras, Senior Sales Coordinator at SUN.
“For some employees, it is just a piece of paper until it’s real. So, we work hard to help people understand our ESOP and how it affects them long-term.”
Ron Diedeman, who has a decade-long tenure with the company and served over three years as president of SUN, strives to inform current employees on what they can expect when they retire from SUN.
“When I was young, I didn’t really worry about retirement,” he said.
“A lot of young people don’t understand or worry about retirement because they don’t really think that far in advance. If it wasn’t for SUN’s ESOP, I wouldn’t have had the great retirement I have now. So now I am a very strong advocate for the plan and how it works to build your future.”
SUN’s expansion is sustained by calculated investments. In addition to the swift payment of its ESOP loans, SUN was debt free on its newest 183,000 square foot facility in five years.
The ESOP gives SUN’s employees a direct stake in the decisions made by the company.
SUN invites employee representatives to sit in on a portion of board meetings and implements a communications committee to act as a liaison between executives, the board of directors, and those on the ground floor.
For employees to fully reap its benefits, they must make long-term commitments to the company. Typically, ESOP participants are vested incrementally over a number of years.
