POWER TO THE PEOPLE
100% Employee Owned and Proud of It.
As an employee-owned company, our ownership culture encourages us to think and act likes owners. “With giving shares of the company to our employees, I believe the employees take ownership in their actions which will continue to keep Cornerstone strong”, said Chairman/Founder Rick Rodell. “If I take care of my employees, they will take care of our customers.”
What is an Employee Stock Ownership Plan?
An employee stock ownership plan (ESOP) is an employee benefit plan that gives workers ownership interest in the company. Being a part of an ESOP can provide unique rewards for employees. Participants in the plan can receive significant retirement benefits, at no monetary cost to them.
Being 100 percent employee-owned means that everyone has a vested interest in the success of the company. Every single employee cares about the health and success of the entire company, not just their job or the project they are involved in.
Being an ESOP enhances Cornerstone’s ability to recruit and retain top talent, as most other companies do not offer this benefit as part of their employment package.
Employee Ownership and Corporate Performance Statistics: (Source: NCEO)
According to the National Center for Employee Ownership, there are 6,600 ESOP’s in the country with over 14 million employees sharing ownership in their company.
Rutgers study found ESOP companies grow 2.3-2.4 percent faster after setting up as an ESOP.
NCEO study found ESOP firms that practice participative management grow 8-11 percent faster than they would have without engaging in his type of management style.
Washington study found ESOP participants made 5-12 percent more in wages and had almost three times the retirement assets as did workers in comparable non-ESOP companies.
NCEO ESOP Infographic - How ESOPs Work
Why Did Cornerstone Choose to Be An ESOP? Specific Benefits to Cornerstone & Employees.
- Supports our culture. We want a company where people work together to serve customers and grow our business. Our goal is to create a positive environment where everyone, no matter what his or her job is, thinks like a business owner.
- Shares the rewards. Everyone’s efforts serving customers make us successful. While employees receive a paycheck for their hard work, we also want them to share in the long-term rewards of their efforts too. Stock ownership rewards our collective efforts to grow the business in the long run.
- Provides an additional retirement benefit that most other companies do not offer. Our ESOP is an additional benefit that can be financially substantial for our employees and their family. The ESOP’s value is based on the company’s performance, so the better the company does, the better the employee does.
- We succeed together. America is a capitalistic country and the highest title someone can achieve under capitalism is to be an owner. Our ESOP plan enables all employees to be owners of Cornerstone Systems, Inc.
“We believe that our employees should share in the success of the company in a truly tangible way. That’s why we created the ESOP, “said Chairman/Founder Rick Rodell. “Participating in the ESOP means that our employees are now owners of the company and benefit financially for a job well done. In this way there is a direct incentive for employees to work hard and take pride in what they do.”
Decades of research show when people understand the ESOP, contribute their ideas, and work together to succeed, ESOP companies outperform other companies.
“Running this company is personal because the business or heart of the company is all about focusing on people” said Chairman/Founder Rick Rodell. “Customers, vendors, employees and their families. It’s a focus on people, it’s not just a business.” It’s been that way since Rick started the company in 1997. “It’s always been about caring about each other and those we do business with. Period.”
In a transaction that closed on December 28, 2012 Rick took it one step further by selling 49 percent of his company shares to the employees, making Cornerstone an ESOP in 2013. “It’s always been about the employees because that’s the best way to take care of our customers and run a successful business. I tend to get all of the credit but it is the employees that do all the work. It is important that they get rewarded for all of their hard work.”
“When you’re 49 percent ESOP, you’re in deep,” said President/CEO Tim Clay. “When we first started this, we thought we’d like the model. But now, after seven years, we’ve seen how the employees have responded to being owners and knew this would be the correct step forward. It gave us clarity on what to do next, and that was to become fully employed-owned.”
That next step took place when Rick sold his last 51 percent and Cornerstone became 100 percent employee-owned January/2020.
“Becoming an ESOP helped in a number of ways,” said CFO/COO Pat Nieman. “People now understand that their work directly impacts stock value of our company. This has impacted our employees work and it has also helped us in the recruiting process. Being a 100 percent employee-owned company is an additional benefit not many other companies can offer.”
Rick is not last to remember his employees. “I’m very thankful someone came up with the ESOP. It allowed me to reward the employees for all of their hard work, and let’s not forget loyalty, there are many here who have worked with me for over 30 years,” Rick states. “Let’s face it, our employees are the ones our customers deal with. I and Senior Staff may get interviewed, have our pictures taken and make a splash in the local papers, but our employees are the reason we get the press.”