CTL Wins National ESOP Company of the Year, Continues Commitment to ESOP Program
CTL Engineering was named National ESOP Company of the Year 2023 at the ESOP Association conference in Washington, DC, after winning the Ohio/Kentucky Chapter in March.
“It’s a great honor to be named ESOP Company of the Year, and it is a testament to the hard work and dedication our employee-owners have put into both our own ESOP program and to educating others about the benefits of becoming an ESOP,” said President and CEO of CTL Engineering CK Satyapriya. “ESOP is shared capitalism with employees of the company. Our Employee Stock Ownership Plan has helped define CTL as an organization providing an important employee benefit. Employee owners get to share in the wealth they help generate as they think and act like an owner represented by their collective hard work and dedication.”
CTL’s Employee Stock Ownership Plan (ESOP) is a benefit employees receive in addition to a typical 401(k) and makes employees of the company beneficial owners of stock in the company without having to invest cash into the company. If the company does well, the stock price will likely increase, benefitting all employee-owners.
“(Many) employees don’t think that the ESOP is a big deal, well I am here to tell you IT’S A VERY BIG DEAL. Not many companies are willing to give the employee a part of the company for their hard work and dedication,” James Gowarty, a retired CTL employee, recently wrote.
“Retirement will approach quicker than you might imagine,” Gowarty said. “ESOP affected me in a unique way. Due to my ongoing medical condition, I am unable to work… Knowing that my ESOP was there was a calming factor in my decision to retire. I am very grateful to have the ESOP in place, and now it is working for me.”
Benefits of an Employee Stock Ownership Plan (ESOP)
There are many benefits to an ESOP program, both to the company and to employees.
According to the Research funded by Employee Ownership Foundation (EOF) for Employee Ownership, multiple studies have found that ESOP companies have higher sales and productivity growth than comparable companies and have been more stable during recessions and the COVID pandemic.
At the same time, employee-owners have a higher household net worth, income, and job tenure. One study found ESOP participants had twice the total retirement balance of comparable non-ESOP workers.
“I could not believe how much my ESOP value had accumulated over just seven years,” John Maul, a retired Construction Inspector with CTL, told the ESOP team recently. “I don’t think most people, including me, realize what a substantial benefit this can be. Thank you.”
The ESOP at CTL
When CTL won ESOP Company of the Year, the ESOP Association identified their commitment to the association and their employees as contributing factors.
“CTL prizes its ownership culture and strives to empower employees to feel, think, and act like the owners that they really are,” the association wrote.
CTL initially established its ESOP program in April 1990. Prior to having an ESOP program, the company was not in the practice of soliciting feedback from managers or offering formal meetings to employees to discuss company goals and objectives.
Soon after establishing the ESOP, CTL began initiating strategic planning meetings, forming majority independent Board members to ensure the executive group is also accountable and creating a focus on morale with the “Fun Czars.”
Financially, the ESOP program has also been a tremendous success. Between 1999-2022, the company’s financial performance far outpaced the pre-majority ownership years. In the last 20 years, the stock has grown 13.5 percent each year.
In fact, CTL was so successful with its own ESOP program that in 2009, it purchased another ESOP, Industrial Communication and Sound, Inc. (ICS) that had previously had flat stock growth. In 2021, ICS was the company’s most profitable division.
Today, CTL’s ESOP program has created an important part of the culture within the company and infuses employee involvement, pride, and celebration of CTL’s success.
From COVID care packages to celebration breakfasts and even communal volunteerism, CTL celebrates their hard work and success together.
After experiencing so much success with the ESOP program, CTL has become a leading participant in its local and national ESOP chapters.
As a company, CTL has worked hard to promote ESOP programs. In particular, CTL’s Vice President and Chief Financial Officer, Ali Jamshidi, served as Chairman of the Board of the National ESOP Association after serving in multiple leadership positions. Additionally, he has been a member of the Board of Trustees and served on the executive committee for the Employee Ownership Foundation (EOF). Due to his passion for ESOPs, he has been able to guide other companies considering ESOPs as they go through an ownership transition.
Continued Commitment
As CTL moves forward, it will continue its commitment to its own ESOP program and educate other companies about the benefits of forming an ESOP.
“CTL stands proudly with employee-owners as we help preserve, protect, expand and strengthen ESOPs and employee ownership,” Jamshidi wrote.
