Tucked between North Table Mountain and the east edge of the Rocky Mountains, Baseline Engineering Corporation was founded in Golden, Colorado in 1998. While Founder John McLain started the company to provide traditional civil engineering services, he held a vision for the foundation of the business to be centered around rewarding employees. Over the past two decades and beyond, Baseline Engineering has since done this vision justice as it’s expanded its expertise, locations, and workforce.
The business began its transition to an Employee Stock Ownership Plan in 2015. This employee-owned structure offers employees shares of the company, which grow in value along with the business itself. While the financial and tax incentives of an ESOP can be easy to find, the qualitative benefits are harder to describe on paper - but they are some of the most impactful parts of being employee-owned for all those that interact with the business.
“As John and the original shareholders have gotten closer to retirement, it has given us a mechanism for transfer of ownership,” said Matt Tyburski, CEO and President of Baseline. “It has taken away the uncertainty around succession planning, and it has really helped our leadership team.”
Outside of leadership, the ESOP has helped cultivate an ownership mindset in employees. Through quarterly meetings to talk through strategy and finances, being encouraged to practice a sense of ownership, and continuous education, communication, and transparency, employees practice ownership in everyday decisions and individual projects for clients.
As a CPA, Matt Tyburski admits he can get into the weeds of the structure and financials behind the ESOP. But, from an employee perspective, employee ownership has created a positive culture where everyone feels invested in the business’ future - from interest in company performance to adjusting their everyday behaviors. Tyburski notes that since the ESOP has been put in place, employees have been even more actively engaged than before.
“The alignment of purpose is very important,” said Tyburski. “Some of the greater good reasons, though, is to share the benefits of ownership with the people that are helping the business to achieve its goals, and that’s really satisfying for us.”
Baseline’s ESOP is fully funded by the company. Employees’ wealth grows through distributions from the S corporation, annual company contribution, and stock appreciation. To participate, employees only have to serve 1000 hours, roughly half of a year. Employee accounts vest over a four year period.
The business plans to continue to grow their ESOP from 30% to 45% within the next 3 to 5 years. Just as Founder John McLain had envisioned, through employee ownership, Baseline has been able to foster an environment that rewards employees - with no plans to slow down.
Watch the video interview to learn more about Baseline's journey to an ESOP. If your business in considering making the conversion to an ESOP or another employee-owned structure, learn about available funding opportunities including the Employee Ownership Grant and Employee Ownership Tax Credit.