No one cares more about a company’s success than the owner. They have the most to gain and the most to lose. What if there was a way to create the same sense of ownership in the minds of employees and provide an incentive for them to work hard and stay with the company?
USA Mortgage does just that by being 100% employee owned!
What is an ESOP?
An Employee Stock Ownership Plan, or ESOP, is designed to give employees a physical stake in the company’s success by providing a stock ownership to everyone.
Each employee’s account is credited with a designated number of shares of company stock or cash contributions throughout the employee’s employment with the company. After retirement, death, disability, or other termination, the employee’s account is given to them (or their beneficiaries) in shares of stock, cash, or a combination of both. The amount of disbursement is based on the current fair market value of the company stock at the time of separation in proportion to the number of shares in the employee’s account.
Since the amount depends on the value of the stock at the time it is disbursed, this provides motivation for the employees to continue to improve the company’s value.
Tax-free contributions can be made by employees – an ESOP is designed to benefit longer term employees for this reason. Typically, there is a vesting period before the benefits can be earned. To sum the benefits of an ESOP up, the longer an employee stays with the company, the more vested they become and the greater the benefits can be realized.
Employee Stock Ownership Plans benefit everyone: employers, employees, and customers.
ESOP Employer Benefits
Employee turnover is one of the biggest roadblocks that businesses can face. ESOP companies report a dramatically lower turnover than average. Keeping the best employees at the company can reduce recruiting and training costs while avoiding the lost productivity that occurs during onboarding.
Employees understand how they benefit from those cost-savings. They tend to be more proactive about doing what’s best for the company from turning off the lights to providing outstanding customer service. Another great benefit an ESOP offers is a better chance dealing with economic uncertainty, which is always an important factor for employers.
ESOP Employee Benefits
Retirement benefits are hard to find these days and is a concern for any employee. ESOPs build retirement funds over time without any monetary investment by the employee. Employees at ESOP companies feel as if they have a bigger voice in the decision-making process and results in more engagement in the company. When employees feel that their performance matters for their company and their selves, it leads to a greater sense of job satisfaction.
Employees are more likely to address issues quickly, act in the company’s best interest and provide solutions to a problem. Employee ownership creates trust in the company and provides a greater sense of teamwork.
ESOP Customer Benefits
Employee-owners who have a strong interest in retaining customers for revenue growth will provide better customer service.
Long-term customer relationships will develop due to less turnover. Long term employees will provide better experience and be more knowledgeable about products and services. Customers will be well taken care of when speaking to an employee here at USA mortgage.
The USA Mortgage Difference
USA Mortgage knows ESOPs like the back of our hand because we have been 100% employee owned for over 3 years! Rest assured that the mortgage professionals you work with are invested in make sure your experience is the best it can be.