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Garney Construction Credits Employees for Company Growth

Sat June 24, 2000 - Midwest Edition
Richard Miller

In 1924, Arthur Garney, a native of Iceland, started a plumbing contracting company in the Kansas City, MO, area. By the time son Charles assumed control of the company in 1962, the company had expanded into the heavy construction industry, with emphasis in wastewater and water treatment projects.

In 1999, Garney Construction generated $78 million in total construction revenues and had 20 active projects primarily in the Midwest and Southwest United States. The last four years have been the most profitable in company history averaging 15 percent growth per year.

This phenomenal growth in part is due to an innovative compensation plan started by the founder’s son, Charles Garney. In 1986, Charles sold 30 percent of the company to the employees creating an Employee Owned Stock Option Plan (ESOP). In 1995, the remaining ownership of the company was sold to the employees making Garney Construction 100 percent employee-owned. At present, there are between 225 and 250 people employed with Garney.

Specifically, a Garney employee receives stock options after 1,000 hours of service. After three years of service, an employee is 20 percent vested and is fully vested at seven years. Shares are held in trust until that time when the employee decides to retire.

This proactive compensation program not only creates an abundant retirement for Garney employees, but also enhances company growth and loyalty. “We’ve realized 15 percent revenue growth every year over the last four years,” said Steve McCandless, vice president of operations. “Part of this growth can be directly attributed to the contributions of our experienced employees. Our goal is to preserve and grow the employee value through income growth.”

This loyalty is best shown in service years with the company. Field service personnel include a backhoe operator with 30 years of service and a 65- year-old in service distribution. Front office service-years ranges from five to twenty years.

Open communication is paramount to Garney’s success. Financial information is provided quarterly to all employees. Every February key management meets for a two-day seminar to review equipment needs and update safety training. In 1997 alone, Garney spent $2.5 million on equipment replacement. Additionally, all officers have operational responsibility, including input on all bids and estimations.

The end result is an experienced staff that not only provides benefit to Garney’s but also shares in the resulting financial gain.

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