Why The Laughing? – because these employees own the company

These employees now own the company

By ANDREW CARSWELL Small Business Reporter – Daily Telegraph

WHEN the boss of food and energy business Gardner Smith wants to talk to the company owners, he simply calls a staff meeting. All the employees at the Sydney-based group have been granted a share of the business, from executive officers through to clerical staff and apprentices. The scheme is one of many employee share plans that Sydney small businesses are beginning to set up in a bid to retain valuable staff and instil loyalty. While large ASX listed companies have long enabled employee share plans, small business owners — consistently burdened by staff turnover — are beginning to see the merit. Gardner Smith executive Glen McMillan believes the company’s share offer has given staff an impetus to succeed. ‘‘We’ve been looking for some time at how we can get employees involved in the company and give them some ownership,’’ he said. ‘‘The feedback has been very positive. We are hoping it will generate some loyalty in our employees and while this is a way of rewarding our staff, we are also hoping it helps on the retention side.’’ Gardner Smith currently offers its staff $1000 worth of free shares each year with further purchase options also available. While relatively new in Australia, Employee Share Ownership Plans are commonplace in North America, the UK and Europe. Director of ownership strategies with the Mercury Centre, Alan Greig, claimed small and medium-sized businesses that have implemented ESOPs in the past few years have, on the whole, done exceptionally well. ‘‘One is seeing a fivefold increase in employee share values in just three years,’’ he said. ‘‘ESOPs assist attraction and retention and staff loyalty — as an owner, employees start to behave like owners and maintain a focus on business performance. ‘‘The longer they stay and the better the business does, the better the employee does through the increasing value of the shares held.’’ Mr Greig said ESOPs were being used for business succession with great success.