The NMR ESOP Origin Story, Part 2
When we last left our heroes, they had decided to embark on an employee stock ownership plan (ESOP) to transfer ownership from NMR co-founders Lynn Hoefgen and Ruth Harvey to companyâs employees.
The process began in 2017, when Lynn and Ruth sold 50% of company stock to the ESOP, beginning a five-year payment plan.
Lynn and Ruth recount that the paperwork and deadlines were intense, requiring lots of dedication and preparation. Ruth highlights that the process requires persistence and attention to detail, along with momentum and employee participation. In the end, though, the move proved seamless. âIt was no accident that the transition was really smooth because of the ownership that people had taken,â Lynn shares.
Tom agrees. âI think most of us were already acting like prospective owners but having an ownership stake provided more motivation as well as higher expectations about increased transparency and broader decision-making.â
Simply put, treating employees like owners produced employee-owners. âPeople fundamentally know what’s best for them, if given a chance to see the effect they have on other people,â according to Ruth. âThey can learn to work and play best with others if they’re given a chance to be heard and seen, and to listen and to see.”
Letting go of control helped Ruth and Lynn transition out of the company. âWe began to be less protective and learn to trust the process of collective responsibility,â says Ruth. She notes the addition of an employee representative below the director level to the NMR board, chosen by fellow employee-owners, as an important step and an idea that, like many, she credits to staffâs direct input.
In 2021, a year ahead of schedule, NMR secured a loan to purchase the second half of the companyâs shares, thereby transferring 100% ownership to employees and finalizing the process.
While implementing the ESOP was cause for celebration, Ruth emphasizes that no company should rest on its laurels; a successful workplace culture âneeds to be renewed, otherwise it ossifies.â
At NMR, our team is more invested in our culture and performance than ever. As our portfolio of work has grown, so has our team of knowledgeable (if not caped) crusaders, committed to its core values. These values include environmental stewardship, producing the highest quality work possible, and care for our colleaguesâ professional and personal wellbeing.
The key to getting through change and difficult times, Lynn and Ruth share, is sticking to oneâs principles. Seven years after the sale began, through political turmoil, the COVID-19 pandemic and lockdowns, market ups and downs, and more, NMR and its ESOP have remained strong by doing just that. According to Tom, âNMR has succeeded because the combination of our culture and employee ownership leads to strong engagement, morale, and retention.â
Lynn and Ruth look back fondly on their decision and have advice for other companies considering an ESOP: âIf you meet the criteria, and there is a desire for it, and there is a level of commitment on the part of the employeesâit is worth it!â
âNMR employees are generally young, and only a handful have retired. Those who stay through the end of their careers will realize substantial financial gains and have increasing say in how the company operates,â Lynn explains. âThe most exemplary ESOP companies demonstrate how employee ownership can be a driving force in a companyâs commitment to its values as well as its financial success. We havenât reached the end of what is possible.â
And so, our stunning conclusion is not an ending at all, but just the beginning. No word yet from Hollywood on a multi-picture franchise based on our exploits.