By CRISTINA JANNEY
Hays Post
Three Hays businesses are in a group of about 4,000 companies nationwide that are 100 percent employee owned under a system known as Employee Stock Ownership Plans, or ESOPs.
These businesses include Tradehome Shoes, which is located in Big Creek Crossing; Western Supply; and Eagle Communications, which is headquartered in Hays and owns and operates Hays Post.
ESOPs are retirement plans that are allowed under federal law, according to ESOP Association. Employees of an ESOP can become vested in the stock in their company in a variety of ways, including numbers of years of service.
Employees who are vested can take the cash value of their shares when they retire, leave the company or upon death or disability.
There are about 7,000 ESOPs in the U.S., covering almost 11 million employees, but only 4,000 of those are 100 percent employee owned.
Tradehome Shoes
Tradehome has been privately owned since it was founded by Alex Mains in 1921 with the purchase of two shoe stores in the Twin Ports of Duluth, Minnesota, and Superior, Wisconsin. The owners of the company sold the company to the employees in 2014, and it became an ESOP.
Tradehome has 111 stores in 21 states across the Midwest. They carry over 150 brands of shoes.
You must be a full-time employee and 21 years old to participate in the Tradehome ESOP. Vesting is based in part on hours worked for the company. Tradehome in Hays has five employees.
Dan Smurawa, Hays manager, has been a manager for a little less than two years and is 20 percent vested in the company.
“Knowing that I can be an owner of a company just boosts my productivity, and I think it goes the same for a lot of Tradehome employees across the nation,” he said.
Smurawa said he saw many benefits to the ESOP.
Highly motivated employees provide better customer service, he said.
“I think I can hold my employees to a higher standard, representing us properly, going out and finding people who genuinely want to help our guests and fit them for what they need,” Smurawa said.
The ESOP is a recruiting tool for Tradehome. The starting manager salary also went up since the company became an ESOP.
“I think a lot of people look toward the future, and if there are benefits and retirement plans for them to plan for and look forward to, I think that can keep quality people too,” he said.
Smurawa is only 22, but he is already thinking about his future.
“I have been educated on compounded interest and the rule of 72,” he said. “Just looking at my parents, I think they could have benefited from early retirements and plans set in stone earlier. I think it is an important thing for our youth to be aware of and take advantage of.
“This isn’t my first retirement plan of sorts. I actually have another one. It is nothing I am in the dark about. There is always something I want to know about our ESOP and any way I can benefit myself and my family. Even at such a young time, the harder that I work now, can leave us better off sooner rather than at 65 when we are not as able to have fun and do the things we wish to do.”
Smurawa said he sees himself staying with Tradehome and building his ownership in the company. He said he is excited to hear news that the company is continuing to grow, which grows the value of the ESOP.
“Ultimately, I like to do what I do, and that is the most important thing,” he said.
Eagle Communications
The Eagle Communications ESOP started with Bob Schmidt, who founded Eagle Communications in 1948.
Originally known as KAYS, Inc. and based in Hays, Eagle Communications began in the commercial television, radio broadcasting and cable television business. In 1989, the company sold its commercial television stations, and now concentrates on radio broadcasting, television, internet and telephone services.
Today, Eagle owns and operates 28 radio stations in Kansas, Missouri and Nebraska; and 60 cable systems in Kansas, Nebraska and Colorado.
In 1998, Schmidt had several options when it came to the ownership of the company, but he chose to sell the company to the employees through the ESOP.
The goal was to continue the benefit of local ownership and provide a pathway for the employees of Eagle to share in the rewards of the company’s success.
An Employee Stock Ownership Trust was created to hold the shares Schmidt sold to Eagle. The trust then took out a loan from the bank in order to pay Schmidt for the shares he sold to the company. Each year, Eagle made contributions to the trust, which in turn helped repay the bank.
In December 2012, the Eagle ESOP purchased all outstanding shares from Schmidt. With this purchase, the ESOP attained a 100 percent ownership position of Eagle.
As the company continues to grow, employee-owners have the opportunity for growth and are rewarded with shares that are distributed from the trust.
Rhonda Meyerhoff, senior marketing specialist, has worked for Eagle for 13 years.
Joining Eagle is like joining a family, she said.
She recalled a time she needed to unexpectedly take time off to care for her 3-month-old grandson. Not only did the company work with her to schedule time to be with her family, but President Gary Shorman personally checked with her to make sure her grandson’s childcare was taken care of when she returned.
“To me, that said at Eagle, family came first,” she said. “That meant something to me.”
Meyerhoff has operated her own business, but at Eagle she has all the benefits of ownership without the hassles of owning a business.
“When I owned my own business, I had to hire and fire and do payroll taxes,” she said. “Now I have all the benefits and I get to concentrate on what I like to do.”
Meyerhoff compared the ESOP to owning a home instead of renting. The employees take greater care of what they own.
“We are rewarded extra when we do extra,” she said. “If the company does well because of all the extra work, we will all benefit. We work together.”
Western Supply, which is headquartered in Hutchinson and has a showroom in Hays, also has an ESOP, but did not wish to participate in this article.
