Green ESOPs? Green Energy Pioneers Transfer Ownership to Employees
As detailed in this article in the North Bay Business Journal, three California solar energy companies have gone down the road of employee ownership as their succession plans.
Solarcraft, a 34-year-old solar company in Novato, CA, became 100% ESOP-owned in 2015, despite more lucrative offers from larger companies. Interestingly, the selling shareholders were concerned about an initial valuation of the company being too high. They felt that too high of a valuation would put too great of a debt burden on the Company. Ultimately, a valuation company with more ESOP experience was used and the valuation was “right-sized.”
Sun Light & Power, which is the oldest solar company in the Bay Area (dating back to 1973) and is in Berkley, CA, now calls itself a “BESOPerative” because it is a B corporation that is also an ESOP with a cooperative governance structure.
Finally, Solar Works, which began in 1985, is significantly smaller than the other two businesses, is putting together a non-ESOP ownership structure that nonetheless transfers ownership to employees.
This is a great example of an idea catching on inside an industry, just like ESOPs have caught on in the craft brewing world and among community banks.
About the Author
Timothy Stewart is an attorney practicing out of our Metro Milwaukee office. He is a member of the Employee Benefits, ESOP and Labor & Employment Relations practice groups. Contact Tim by email or by phone at (262) 754-2869.
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