From Bob’s Desk: Finalizing Elm’s transition to an ESOP

By Bob Bacon

I need a vacation. Badly! I am pretty sure I can take one next week. Today, we gain another advantage as a company.

We have begun the task of finalizing the transition of Elm from a company owned by a few people to a company owned by all its employees. It has been an arduous process, many of our folks have worked hard dotting all the I’s and crossing all the T’s. Tim Williams has put in a tremendous number of hours doing his regular work plus all the accounting and analysis required by the ESOP. This is something we have never done, meaning we are learning and gaining understanding as we go. It was a lot and I would do it again. The more I understand and learn, the more convinced I am we made the right decision.

Elm is a good company with a fantastic culture. You might ask how could we make it better? Studies show ESOPs perform 2.3% better than non-ESOPs. Our net income is less than 10% and 2.3% is a huge advantage. ESOPs have several other advantages. For Elm the process of becoming one has pointed out many operational business things we could do better.

To help us improve our business processes we have recruited and hired a VP of Business Operation, Sarah McCarthy. Sarah comes to us from a large healthcare service organization. Her background includes sales, staffing and several years in healthcare. Perhaps what impressed me most about her was her ability to drive change in the healthcare business. Healthcare hates change! Sarah will be picking up the administrative leadership work Keith, Mike and I have been doing on an ad hoc part-time basis.

Our safety and risk control work continue to pay dividends. Elm received a $212,192 dividend from past policy years where we had very low claims and expenses. KEEP UP THE GOOD WORK it benefits everyone.

A final note about the ESOP — it has taken me over a year to develop a true understanding of how it all works! The same will happen to you. We will provide education and training, but it will probably take three years before you really understand how it works and see how it will financially benefit you. What you get today won’t change, what you get when you retire will. Some patience and trust please.