The Modern Group, one of the nation’s largest distributors of material handling, construction and maintenance equipment, has announced that the company has completed the transformation to a 100-percent Employee Stock Ownership Plan (ESOP). The company is now solely owned by the employees of the Modern Group.
Modern’s board of directors approved the complex transaction unanimously and is the culmination of an 18-year transformation of the company into a 100-percent owned ESOP.
The company, which was formed by Joe McEwen in 1946, had begun the ESOP process in 1985. When McEwen retired in early 2003, he offered to sell his shares to the ESOP.
“The completion of the ESOP process is a milestone in the company’s history,” said David Griffith, president and CEO. “The employees of the Modern Group have always been the backbone of the company’s success and the 100-percent ESOP puts the company’s ownership directly into the hands of those who will make our future even brighter.
“Joe [McEwen] believed very strongly in sharing in the success of the company with his employees. We’ve given our employees, through ESOP, 401K and year-end cash bonuses, more than our retained earnings in the company. And we think that you ought to give to the people who earn it; it’s simply ethical,” he said.
“This also is an outstanding opportunity for each Modern employee for the creation of wealth in the company’s retirement account,” added Jack Smith, company chairman.
Employee ownership is a growing part of the U.S. economy. The National Center for Employee Ownership, a nonprofit research organization, estimates that approximately 25 million to 30 million employees own stock in their companies through ESOP’s, broad-based stock options plans, employee stock purchase plans and 401(k) plans. In addition, a Rutgers University study in 2000 of 343 ESOP companies found their post-ESOP performance exceeded pre-ESOP performance sales growth by 2.4 percent per year and in sales per employee by 2.3 percent per year.
In Modern’s ESOP program, an employee automatically enters it once he or she logs 1,000 hours.
Founded in 1946, Modern Group, headquartered in Bristol, PA, ranks as one of the largest independent companies in the industry, representing more than 400 product lines. In 2000, Modern was voted as one of the best businesses in Pennsylvania to work for. The company also remains number one in sharing profits with its employees.
With more than $100 million of collective annual sales, Modern Group’s five companies provide sales, leasing, short-term rental, service, parts, training and financing solutions. It employs more than 550 people at 22 locations in Pennsylvania, New Jersey, Delaware and Maryland.
For more information, call 800/223-3827 or visit www.moderngroup.com.