My Journey Through Employee Ownership

Shortly after college, what started as a casual interest in employee ownership, turned into a lifetime career and journey that has paid many dividends to me as well as other employee owners.

My journey began as a 25-year-old, having just taken a position as an insurance and risk manager with DENTSPLY International, Inc. At the time, DENTSPLY was headquartered in York, Pennsylvania, and was the world’s largest manufacturer and distributor of dental supplies and equipment, with operations around the globe. It was a great opportunity for me, and I eventually moved to the company’s Finance department to take on other responsibilities including employee benefits and international insurance programs.

Within the first year of taking the new position, I attended a national conference in Washington, DC, hosted by Risk and Insurance Management Society (RIMS). It was a week-long conference, with the first half of the week involving sessions on property and casualty insurance and the second half employee benefits. It was during the second half that I walked into the session, “Employee Stock Ownership Plans or ESOPs”. It wasn’t on my agenda for the day, but the title intrigued me.  

DENTSPLY did not have an ESOP but, later that year, took themselves private and started an ESOP to stave off a takeover attempt by a smaller company in Palo Alto, CA. The ESOP was announced to their U.S. employees that December and became effective January 1 of the following year. This was exciting news and the beginning of a long, successful journey for the 1,000 domestic employees. 

Employees were skeptical at first and the termination of a lackluster pension plan wasn’t received favorably. In fact, the older, longer-term employees thought the acronym ESOP should mean “Executives Stole Our Pension.” However, after seven years of annual contributions of 25% and favorable stock growth out of the gate, the skepticism quickly vanished. 

During my tenure at DENTSPLY, my involvement with the ESOP increased to include assisting with plan administration, financial reporting, and annual allocations. I was asked to read, “The Capitalist Manifesto” by Louis Kelso. In reading this book, the message became abundantly clear to me that ESOPs were the best way for an employee to gain wealth and a more secure retirement. DENTSPLY’s CEO/President had a goal of bringing its foreign employees into employee ownership in countries where permitted. I assisted in the formation of the first ever ESOP or superannuation plan in Australia that held employer stock. With the help of tax, legal, and benefit consultants, the plan was written so it would be considered a qualified retirement plan in Australia yet not be considered a public stock offering.  ESOPs and similar plans were later formed in Canada, Switzerland, and United Kingdom. DENTSPLY became members of The ESOP Association (TEA) early on and I often relied on the staff at TEA to obtain statistics and other information on employee ownership to help create communications that would be shared with the employees in these countries.

Five years later, I left DENTSPLY to take a position with a company that became a global insurance broker. At the time, DENTSPLY’s stock price had grown annually to the point that, after 20 years, the average employee who was there at the inception of the ESOP had 19 times their annual earnings in their ESOP. Although DENTSPLY returned to being a public company, the ESOP still exists today. Even with the old vesting rules, I was able to receive a handsome distribution on the 10-year anniversary of my date of hire into my newly-formed IRA that would help with my future retirement.

My journey with ESOPs, however, didn’t end there. Soon after becoming an insurance broker, I contacted TEA to see if they would be interested in offering a fiduciary liability insurance program to their membership. Fiduciary liability insurance, as well as Directors and Officers liability insurance, was difficult for most ESOP companies to obtain. The first and only ESOP Fiduciary/D&O liability insurance affinity program was formed in 1989 and continues to serve hundreds of ESOPs today and has been endorsed by TEA since 1989. 

My ESOP knowledge and ability to educate insurance companies regarding their value paved the way for AIG and Great American to offer coverage to ESOP companies on a national basis. The ESOP affinity program grew with each year and was instrumental in helping companies form their ESOP, with the knowledge that this insurance was obtainable at a reasonable cost. The first ESOP that purchased this coverage in January 1989 is still present today. I spent the next 30 years traveling around the country, speaking at various TEA chapter meetings and annual meetings regarding this insurance and educating ESOP companies to be smarter purchasers of this insurance. 

I had the opportunity to join a regional employee-owned insurance broker in Lancaster, Pennsylvania, in 2007 and continue my involvement with the ESOP affinity insurance program.  I never thought I would have another opportunity to work for an employee-owned company but joining Murray Insurance Associates enabled me to share my knowledge of employee ownership with their 160-employee-owned agency. Murray’s ESOP had been formed about 15 years earlier and I soon became involved with their ESOP communications committee, where Murray won several awards at the national annual conference in Washington, DC. I helped coin the phrase “employee-owned; client-focused” that was on every Murray business card. I later assisted with setting up communications committees with other newly-formed ESOP companies in the region and became an internal trustee of Murray’s ESOP until the company was sold to a national insurance brokerage firm, AssuredPartners, in 2021.

I am a firm believer that, if you are provided an opportunity that was afforded to you, efforts should be made to pay it back. In the early 1990s, I helped establish the Pennsylvania/Delaware Chapter of TEA, along with Don Rongione of Bollman Hat Co., Tony Campisi of The Glatfelter Group, and Schadler YESCO.  I later become President of this Chapter and then Trustee of the Employee Ownership Foundation (EOF), as well as a member of the Board of Governors of TEA and a member of the fiduciary committee within TEA.

During my 40+-year involvement with ESOPs, I have met many wonderful employee owners of tremendous ESOP companies, along with countless ESOP professionals who all share the same enthusiasm about employee ownership. I do not pass up any opportunity to ask employees of ESOP companies about their experience working for an employee-owned company and I try to hire or purchase from employee-owned companies when I can.  It truly is a great experience to help a great cause and a growing movement across the country. 

The culture of an employee-owned company is unique and fosters the success and growth of the ESOP company. Having worked for two ESOP companies and having several hundred ESOP companies as clients, I can honestly say that my career in employee ownership has been a wonderful experience. I could not have imagined a more rewarding journey than employee ownership. ESOPs are truly a good thing, and we need to do our part in communicating to the public and professions that ESOPs are the best way for employees to obtain their wealth for a more secure retirement. 

If you want to be part of the growth of the ESOP movement throughout the country, please help by donating to the Employee Ownership Foundation through its website, www.employeeownershipfoundation.org.

Jeff, a graduate of York College of Pennsylvania, is a recently retired executive of Murray Insurance Associates who now serves as a Murray consultant. He is the founder of the ESOP Executive Liability Insurance Program as well as founder of a professional liability insurance program sponsored by American Society of Appraisers (ASA).

Jeff can be reached at jgelburd@murrayins.com

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Contact Demetrios Karoutsos at dkaroutsos@esopassociation.org.