Hypertherm is a 600-person company based in Hanover, New Hampshire, which makes metal-cutting equipment. Their plasma cutters are used for applications ranging from hand-held cutting to automated manufacturing. Both Hypertherm and its wholly-owned subsidiary, Centricut, manufacture consumables for cutting equipment.
Hypertherm has been widely recognized for its employee-friendly management style: most recently, the company was ranked number 12 on Fortune Magazine's list of "The 100 Best Companies to Work For."
As their website states, Hypertherm's management practices include "a no-layoff policy, continuing education programs for all associates, and company-wide profit sharing, that over the past few years, has averaged 28% of base salaries for more than 400 eligible associates."
Last year, Hypertherm founder Richard Couch established an ESOP in order to ensure Hypertherm's continued existence as an independent New Hampshire company. In December, 2001, the documents were signed and the ESOP became official.
Within a week of announcing the ESOP, 20 key managers at Hypertherm held a meeting with Ownership Associates. The purpose of the meeting was to preview a training session for all Hypertherm employees, or associates. Managers enhanced their knowledge of ESOPs and provided feedback for customizing the training session for Hypertherm's associates.
The agenda for the managersí meeting was:
- Preview the training for Associates
- Introduction to the Psychology of Employee-Ownership
- Talking about the ESOP with employees
- Planning Future Ownership Activities
- Questions and Answers
One month later, employees were invited to sign up for training sessions conducted by Loren Rodgers of Ownership Associates and Bob Murphy of Hypertherm. Each session lasted approximately 75 minutes, and included a handout for participants.
0:00 - 0:05: Introduction and Welcome (Bob Murphy)
0:05 - 0:10: Overview of the Hypertherm ESOP Transaction (Bob Murphy)
0:10 - 0:15: Capsule History of ESOPs (Loren Rodgers)
0:15 - 0:25: ESOP Ownership: Legal highlights (Loren Rodgers)
0:25 - 0:35: ESOPs in the United States (Loren Rodgers)
0:35 - 0:40: The Ownership Incentive (Loren Rodgers)
0:40 - 0:45: Basic Valuation (Loren Rodgers)
0:45 - 0:65: ESOP Basics: Participation, Allocation, Vesting, Distribution (Loren Rodgers)
0:65 - 0:75: Questions and Answers (Bob Murphy and Loren Rodgers)
The eleven training sessions took place over three days. By the end of the program, nearly 400 Hypertherm associates had learned about the new ESOP and how it would affect them.
"Although we have worked hard at Hypertherm to develop an 'ownership culture', particularly through our profit sharing plan, the ESOP was an entirely different concept for our leaders and our associates. We realized early on how important our communication efforts would be, and we were most fortunate in choosing OA as our partner in these efforts. We had close to 100% participation in the training sessions, as word spread about their value, and our feedback from our associates has been extremely gratifying. We expect to be working even more closely with OA on future communications."
--Bob Murphy, Hypertherm