Employee-Owned Companies in the Manufacturing Industry

The employee stock ownership plan (ESOP), is a benefit plan that gives a company’s workers an ownership stake in the business through the company’s stock. Employee-owners have the chance to influence company direction and increase their value at all stages of employment.

Manufacturing is the largest industry sector for ESOPs, with almost 21% of employee-owned firms being manufacturers, according to the 2024 National ESOP Database from the National Center for Employee Ownership (NCEO).

According to Brian Baker, the President, and CEO of Sentry Equipment, “The key to an ESOP is tha&rt if people own a piece of the place that they work, they are going to care more. Yousquo;re going to be more engaged. You’re going to be more passionate about the business than if you’re just an employee showing up every week to get a paycheck.”

Sentry Equipment is a manufacturer of equipment that supports efforts in power generation, petrochemicals, and wastewater treatment. The company became an ESOP in 1986 when the founding family, the Henszeys sold it to the employees. To create a culture that supports action and decisions from the employees, there are five pillars that need to exist. Brian Baker outlines those pillars to support the creation of an “ownership” culture:

1. Financial information is readably available to employee-owners so they can understand their role in profitability and the strategic vision.
2. Engagement: Employees are a vital part of the organization's success, having their contribution is important
3. Trust: Having information readably available and access to leaders in the company is an important aspect Sentry follows. They need to trust the strategic decisions of leaders and co-workers and how they are being accomplished through communication.
4. Responsibility: Employees should feel they can make things happen, and also understand the impact and accountability that comes with decision-making.
5. Growth: Having an environment that supports professional and personal growth, skills development, and continuous improvement is one that paves the way for business expansion.

Stock ownership plans are not new, but they have been embraced and are on the rise for businesses. There is a sense of pride that employee-owned companies feel and builds a culture for the company as a whole. To learn more about ESOPs, check out Employee Stock Ownership Plan Facts from 6,500 ESOPs.