[NEW EPISODE] Increasing Employee Ownership Through Succession Planning

EPISODE SUMMARY:

In this episode, Tommy D sits down with Marie Davis and Matthew Epperson from the Georgia Center for Employee Ownership (GACEO) to unpack how business owners can use succession planning to keep companies, jobs, and legacies in their communities. They outline the three major models of broad-based employee ownership—ESOPs (a regulated retirement trust invested in the company), worker cooperatives (direct ownership with patronage profit sharing), and employee ownership trusts (EOTs) (mission-driven trusts that share value broadly)—and explain when each fits. Key clarifications: employees don’t pay to join an ESOP, governance typically remains with a board, and sellers may access tax advantages such as a §1042 capital-gains rollover (for ESOPs and co-ops). The conversation anchors these ideas in the “silver tsunami” of boomer-owned businesses and why proactive planning preserves local economies.

Marie and Matthew share real-world examples: Clegg Auto’s EOT-backed expansion that kept Augusta’s Regency Auto open with the same team and a new profit-sharing purpose trust; the growth of Love Is Love Cooperative Farm from five founders to 20 employees; and Athens-based JOMA Construction, which went 100% ESOP early, aligning a young workforce around long-term wealth building and retention. Beyond the why and how, they highlight practical on-ramps for owners and advisors—GACEO’s Employee Ownership Ambassador Program and Exit Pro 101—and point to a national ecosystem of state centers (via EOX) that can match companies with experienced legal, accounting, valuation, and financing partners.

If you’re a founder, CFO/CPA, exit planner, or community leader exploring alternatives to traditional M&A, this episode shows how to transition ownership to employees, protect culture, and keep profits local. Learn more at GACEO.org and connect with Tommy D to continue the conversation.

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Show Notes

‍Segment 1

Tommy begins the first segment by welcoming Marie Davis and Matthew Epperson from the Georgia Center for Employee Ownership to his office at Vanguard Benefits. They discussed the center's work and Tommy's nonprofit sector connector role, including his focus on ending the stigma around mental health. The subject then shifts as Matthew shares his journey into employee ownership, starting with his experience working at a customer-owned grocery store in Athens, Georgia, which introduced him to the concept of community-supported agriculture. The first segment comes to an end with Marie sharing her background in social work and financial services, highlighting her experience with mentorship programs and her interest in employee ownership after witnessing the decline of her family's business.

Segment 2

Marie kicks of the second segment by explaining the importance of employee ownership in Georgia, highlighting the impact on local communities and the need for succession planning to prevent businesses from closing. She introduced the concept of Employee Ownership Trusts, which Matthew elaborated on as a newer form of broad-based employee ownership. Matthew shared a case study of Clegg Auto, a successful Utah-based auto repair company that uses an Employee Ownership Trust to promote employee engagement and support their mission of helping employees find their purpose.

Segment 3

The third segment focuses on different types of employee ownership structures, including ESOPs, worker cooperatives, and Employee Ownership Trusts. Marie and Matthew explained how these structures work, with ESOPs being indirect ownership through a trust and worker cooperatives involving direct ownership with annual profit sharing. They discussed the importance of planning early for business succession, noting that JOMA, a construction company, became 100% employee-owned due to its young workforce. The conversation also covered how these ownership structures can provide tax benefits and preserve company culture while allowing business owners to transition out of their businesses.

‍Segment 4

The final segmend begins with a discussion focused on employee ownership programs, with Matthew explaining that capital gains tax can be deferred through a 1042 rollover for ESOPs and worker co-ops. Marie and Matthew described two upcoming educational initiatives: the Employee Ownership Ambassador Program, a 4-week training for professionals starting November 6th, and Exit Pro 101, a one-hour continuing education program for CPAs and SEPAs. The conversation concluded with Marie mentioning that October is Employee Ownership Month, highlighting their recent event with the Georgia Chamber President and their plans for regional events next year.

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Transcript

00:00:43.500 --> 00:00:46.120 Tommy Dimisa: We are.

00:00:46.380 --> 00:00:57.340 Tommy DiMisa: Back. We're back, but it's a little deceiving, gang, because every week I tell you, I mean, 230-some-odd weeks in a row on a Friday, I tell you, I'm two flights up from the kitchen where I get my coffee, I'm in the attic.

00:00:57.600 --> 00:01:20.650 Tommy DiMisa: But I'm not today. I'm not, I'm not. The show's philanthropy and Focus, your boy's Tommy D, the nonprofit sector connector. I am not in my attic. If you were here with us last week, maybe you figured out why we're not in the attic. I was having all sorts of Wi-Fi issues. We hit a spot in the show where I tried to get to my porch to do the show, and my guest was interviewing himself for about a minute and a half, and that's not exactly what I was looking to have happen

00:01:20.650 --> 00:01:39.799 Tommy DiMisa: Today, that is not how we're gonna do things anymore. And because your boy's on the road a lot, I didn't get to really address the whole Wi-Fi in the attic issue. So we'll deal with that later. So we're here at my office. Shout out to Vanguard Benefits. This is our employee benefits agency. Talk about employees, we're gonna talk about a lot of employee stuff today. But Employee Benefits Agency for Vanguard Benefits.

00:01:39.800 --> 00:01:45.670 Tommy DiMisa: We help nonprofit organizations, and for-profits for that matter, attract and retain talent using

00:01:45.670 --> 00:02:04.459 Tommy DiMisa: Creative Benefit Strategies, so I'm busy day on the phone later today with clients, so it worked out, so let's do it from the office. I am here with two new colleagues of mine from the Georgia Center for Employee Ownership, G-A-C-E-O. I don't know how you pronounce that. Is it Gasio? How do you guys say it?

00:02:04.850 --> 00:02:06.440 Marie Davis: G-A-C-E-O, you were.

00:02:06.440 --> 00:02:09.050 Tommy DiMisa: All you do is you say… you say the letters? Okay.

00:02:09.050 --> 00:02:11.090 Matthew Epperson: But you're giving us ideas, Tommy.

00:02:11.090 --> 00:02:32.399 Tommy DiMisa: I would say, I don't know if it's Gaccio, I mean, now it sounds like a guy we know. Oh, you know Joey Gaccio from the neighborhood? It sounds like that, you know, like, that's a guy we used to know. All right, listen, let's get after… that was Matthew Epperson's voice, that was Marie Davis' voice. We're gonna get into the show, we're gonna have some fun, I'm already being silly, I don't know what… I can't help myself. Alright, so listen, are either one of you a singer?

00:02:33.860 --> 00:02:34.620 Matthew Epperson: Only in the shower.

00:02:34.620 --> 00:02:35.620 Marie Davis: not.

00:02:35.620 --> 00:02:41.040 Tommy DiMisa: In the shower, Not even in the shower, Marie? Oh, sure, yeah, yeah, yeah. Okay, got it, alright.

00:02:41.280 --> 00:03:04.469 Tommy DiMisa: Well, we're not gonna have to talk about people showering and singing, but I… the reason I ask is I sometimes just break out into song, and there is a… I have a theme song to the show, you heard, like, the… the… just the instrumental part there, but you'll hear it when it comes back, and we'll talk about that. I used to sort of say to my folks who would come on the show, hey, listen, by the third or fourth break, we gotta sing the song together. So we'll figure that out, maybe we'll sing later on.

00:03:04.470 --> 00:03:12.159 Tommy DiMisa: Alright, let's get after it. This show is philanthropy and focused. Every single week, I interview executive leaders and nonprofits to help them tell their story.

00:03:12.200 --> 00:03:26.410 Tommy DiMisa: and amplify their message. Focus as well with a PH, because I think it's cool, and there's a lot more stored behind that, but if you want to hook up with me, connect with me, TommyD at philanthropyInfocus, P-H-O-C-U-S dot com. Tommyd.nyc on the Instagram.

00:03:26.410 --> 00:03:32.969 Tommy DiMisa: the nonprofit sector connector on the Instagram, and the important, not that any are more important than the other, but very,

00:03:33.690 --> 00:03:55.910 Tommy DiMisa: a critical focus for me is hashtag ending the stigma together. We're ending the stigma around mental health. It's very important to me. Socializing that, I'm normalizing those conversations, so look up Ending the Stigma Together on, on Instagram. Let's connect that way. All right, that's it. Enough promotional stuff. Here, let's get into the show. One last thing, actually, I just remembered. The New York City Imagine Awards was the other night, and it was awesome.

00:03:55.910 --> 00:04:18.370 Tommy DiMisa: 240 people in a room celebrating the work in the nonprofit sector. The Long Island Imagine Awards applications are out right now. Marie and Matthew, I'll fill you in on that when we meet next week, just so we could spend more time so you know what that stuff's all about, because it's cool, collaboration, connections, networking, the whole thing. But shout out to the team at Sereni & Associates, who did a wonderful job, putting together that event, specifically.

00:04:18.370 --> 00:04:26.470 Tommy DiMisa: My friend Kellyanne Cerini, and my friend Hilary Needle, who put that event together and do such a, such a great, great job. All right, that's it. Enough. Let's get to the show.

00:04:26.710 --> 00:04:45.629 Tommy DiMisa: All right, there's… Joey Gaccio is not going to be here, I just made that up, that's not even a name, that's not even a real person, it's nothing, but the Georgia Center for Employee Ownership. I think it was Kathy Smith who connected us from TNG, the networking group, and she knows me, and we're collaborating, she's doing some work with one of my projects right now.

00:04:45.630 --> 00:04:46.820 Tommy DiMisa: And,

00:04:47.130 --> 00:05:03.059 Tommy DiMisa: she knows me as the Nonprofit Sector Connector, so she said, you know what? You guys gotta know Tommy D. And that's how we got here. We first connected on a Zoom, and I think I was up in the Poconos, if I'm not mistaken, with family over the summer, and we had a cool call. So, here's what I like to do on the show, and I told you both.

00:05:03.060 --> 00:05:10.819 Tommy DiMisa: I want to know, how do we get here? How do we get to this organization? But we'll start with your backstory. So, Marie?

00:05:10.940 --> 00:05:15.089 Tommy DiMisa: Play or pass, do you want to start with your story first, or should Matthew?

00:05:15.520 --> 00:05:16.599 Marie Davis: I'll let Matthew start.

00:05:16.780 --> 00:05:21.689 Tommy DiMisa: Well done. Okay, Matthew, take us down memory lane, if you will. Your memories, because we don't know them yet.

00:05:22.540 --> 00:05:25.070 Matthew Epperson: Sure, yeah, I'll do my best, so…

00:05:25.130 --> 00:05:41.839 Matthew Epperson: Thanks so much for having us, Tommy. Pleasure to be with you all in the audience. So, yeah, I'm Matthew Epperson, and I'm based here in Athens, Georgia, and kind of the way that I came to employee ownership was really, like, a lot of things in this world by accident. You know, I was working on campus, you know, so Athens, Athens, Georgia, I know

00:05:41.840 --> 00:05:48.249 Matthew Epperson: you know that we're a music town, but a lot of people know us as bulldog country. Okay. And so I was a college student.

00:05:48.250 --> 00:06:02.280 Matthew Epperson: And, yeah, I was actually working on campus. I was working for Campus Dining, and you know, while I was there, I just had a coworker who was like, you know, there's just something about this, like, little weird grocery store over on Prince Avenue. I think you'd really enjoy it.

00:06:02.360 --> 00:06:03.450 Matthew Epperson: And I was like, wait.

00:06:03.450 --> 00:06:06.810 Tommy DiMisa: The workers said that to you, that you would enjoy the grocery store? Okay.

00:06:06.810 --> 00:06:23.770 Matthew Epperson: Yeah, he's like, go check it out, there's something about it, I think you'd really like it. And so what I had no idea about at the time was that that grocery store was a cooperative, and so the thing that was strange, well, obviously it's just that a bunch of weirdos are there, but… and I found my people, my tribe, but it had shared ownership.

00:06:23.770 --> 00:06:37.489 Matthew Epperson: You know, so the customers are the ones who own that grocery store, which I know y'all in New York are a lot more familiar with. Down here, we don't know much about sharing ownership of grocery stores when you're just a customer. So I got plugged in as much as I could wherever I record.

00:06:37.490 --> 00:06:39.679 Tommy DiMisa: You're not even saying the employees, you're saying the customers? Correct.

00:06:39.680 --> 00:06:41.090 Matthew Epperson: Correct. Wow.

00:06:41.090 --> 00:06:50.369 Tommy DiMisa: Okay, so, wow, that's a whole… I came into this conversation expecting one thing, and you flipped it on me already, and we're just getting started, which is great, because that means we're learning.

00:06:50.370 --> 00:06:50.870 Matthew Epperson: Absolutely.

00:06:50.870 --> 00:07:06.529 Tommy DiMisa: I want to ask you, what was it about that spot that your coworker was like, dude, you gotta check this place out? Like, what was… because maybe the vibe is the fact that it was custom… obviously, the vibe is the customer-owned thing, and the employee engagement, and all that, like, what was it

00:07:06.530 --> 00:07:12.949 Tommy DiMisa: what was the weirdness, so to speak? You know, because you said you found your tribe, you found your people, but what was the difference there?

00:07:12.950 --> 00:07:37.709 Matthew Epperson: Yeah, no, absolutely. I mean, I think it was just the fact that, like, well, you know, there was a structural piece of it, you know, which is that it was owned by its customers, but yeah, I think what that kind of grew out of was just, like, a very much a community-driven effort to secure local food, you know, that we could actually support local farmers, and do that in a business that, you know, basically we sort of thought of ourselves almost as, like, the 7 days a week farmer's market, you know, because a lot of us thought, like, okay, farmer's market, that's the Saturday morning thing.

00:07:37.880 --> 00:07:41.340 Tommy DiMisa: Yeah. But it could be a grocery store, you know, and why not? And it's like…

00:07:41.340 --> 00:07:54.879 Matthew Epperson: these are some ideas that kind of… I feel like we've lost over time, right? It's like, let's have direct connection to farmers, and that was a huge idea, and the fact that, you know, we had leadership from our community, right? That, like, people were actually running the store, were members of the cooperative.

00:07:54.880 --> 00:08:07.910 Matthew Epperson: So, that was a real introduction to me. It was, like, this idea that, like, not only was ownership in a sort of, like, a legal sense of, like, all these customers can own a store, but also they can be the leaders, they can be the board of directors, and be responsible for the vision of this organization.

00:08:08.160 --> 00:08:21.879 Tommy DiMisa: So let me ask you another question before we keep going with your story. Like, what… from the perspective of… it feels to me like CSA, like, you know, Community Sponsored Agriculture, is it similar, or am I just because of produce, is that why you think I'm being drawn there?

00:08:22.150 --> 00:08:39.620 Matthew Epperson: No, no, you're absolutely right. I mean, it's very much like it's the CS, right? Community-supported, and it's agriculture, so it's just… it's a different way of doing it. In fact, many of our farmers have CSAs also, so they're putting out, you know, they sell it to our store, they sell it to the farmer's market, they also have the box, you know, the CSA box that people pick up, so absolutely.

00:08:39.620 --> 00:08:48.009 Tommy DiMisa: Got it. Yeah. Alright, so hit me a little further. So you're into that space, you're figuring this out, it's something… it was new to you, you didn't even know about it, and then now you're exposed to it. What happens next?

00:08:48.380 --> 00:09:12.860 Matthew Epperson: Yeah, so basically it was just one opportunity after another. So, we had the opportunity for our employees that somebody who wanted to run could run for the board of directors. So that's what I did, probably around 2011. And it was really, like, coming into leadership, actually, you know, really for the first time in my life. I'd never been on a board of directors. I barely knew what one was. So getting elected to the board was just a chance to kind of see the organization from that more, like, you know, that 30,000-foot kind of view.

00:09:12.930 --> 00:09:18.450 Matthew Epperson: And to really find out more about… there's actually, like, a whole movement behind this, you know, so it wasn't just us.

00:09:18.450 --> 00:09:43.419 Matthew Epperson: doing our thing here in Athens, Georgia, but we're actually part of a national movement, you know, for people to take ownership within the food system, right, to create more access. And that's actually a lot of the history of, you know, food co-ops, right? It's like, back in the 70s, you know, we don't have to go too far down this rabbit hole, but, you know, like, accessing organic food was, like, very unusual and rare back in the 70s, you know, so the food co-ops really made it normal. So it's a long tradition, and so I was just kind of picking up on all of that, and…

00:09:43.420 --> 00:09:50.740 Matthew Epperson: learning how to be a leader, that I found out about this whole sort of shared ownership movement, and then, you know, it's kind of been a zig and a zag ever since.

00:09:50.940 --> 00:10:14.449 Tommy DiMisa: Yeah, alright, so we're gonna get into all that, man, because it's really gonna… that's… that informs the beginning of your story, for sure, and you have so much depth about this, and so much knowledge about this industry and this work, so we're gonna get into all that. Marie, my friend, you know, how… how did you get connected to this work? I mean, listen, I have a bio on both of you, and if I was gonna read the bios, that's boring, and you didn't even need to show up then. So really, I want to hear the story.

00:10:14.450 --> 00:10:15.590 Tommy DiMisa: Through your eyes.

00:10:15.590 --> 00:10:32.240 Marie Davis: Okay, well, I too went through Athens. I live… grew up in Atlanta, so I am a Georgian. But spent my time in Athens getting a degree… I always knew I wanted to help people, so let me throw that in there, and got a social work degree thinking I was going to go on to law school.

00:10:32.260 --> 00:10:49.159 Marie Davis: But when I came out of college, a friend of mine, of my father's offered me a job in the financial industry, and ended up going to work for a private security, financial securities firm, very well known in the Southeast, doesn't exist anymore, that's another story.

00:10:49.160 --> 00:10:57.279 Marie Davis: But got my license and stayed for 10 years, and we had our own, capital markets group who

00:10:57.910 --> 00:11:13.180 Marie Davis: knew… they created ESOPS. ESOPS started in the 70s, this was in the 80s, so I knew what it was, and I knew people that did it, and I knew some of the companies, but, you know, I just sort of forgot about it. I love to have my family and whatever.

00:11:13.180 --> 00:11:28.699 Marie Davis: And, what really got me here, Tommy, is that I ended up going back… not going to law school. I just, you know, you get out there and you get a paycheck, and you realize what you have to do to go to law school. I didn't do it. So I went back into the field of social work.

00:11:28.870 --> 00:11:34.499 Marie Davis: And ended up seeing such a tremendous need, especially, I helped

00:11:34.730 --> 00:11:43.629 Marie Davis: run a group home, a teenage girl group home, and I realized that people need directions so greatly that I started,

00:11:44.510 --> 00:11:58.600 Marie Davis: finding mentors for these girls, which morphed into creating mentor programs, running a statewide mentor program, and working for the National Mentor Network, which sounds like I'm running off the rails, but believe me… No, not at all.

00:11:58.600 --> 00:12:06.070 Tommy DiMisa: Not to me it doesn't. Not to these folks, it doesn't. This is the real thing. It's mentorship, it's connections, it's building relationships. You're right on. Keep it going.

00:12:06.410 --> 00:12:11.690 Marie Davis: So, when I found out about this opportunity, they wanted someone

00:12:11.880 --> 00:12:25.460 Marie Davis: young, who could do the social media, they called it a launch manager, and I'm like, what the heck is a launch manager? But I was looking for a full-time job, and so I took it, and I said, look, you need to have some…

00:12:25.660 --> 00:12:39.910 Marie Davis: forethought and give me a chance to really build some relationships, not just put this on social media. So, I think that my background and the love of people and wanting them to know about this amazing tool that has gotten

00:12:40.280 --> 00:12:41.960 Marie Davis: Lost in space.

00:12:42.330 --> 00:12:47.470 Marie Davis: This is what we're doing, this is what we're about, and we're gonna talk about that more later, but you ask about me.

00:12:47.640 --> 00:12:52.739 Marie Davis: My family's business was a family business. I grew up,

00:12:53.130 --> 00:13:00.929 Marie Davis: running the cash register, and I saw my family's business die with my parents.

00:13:01.200 --> 00:13:02.800 Marie Davis: And so…

00:13:03.120 --> 00:13:17.579 Marie Davis: the tremendous draw of employee ownership, preserving legacy, if people know about it, they… I'll look at that, but what happened with my family business really is relevant to what we do every day.

00:13:18.370 --> 00:13:34.160 Tommy DiMisa: Yeah, it's… I gotta tell you, man, it's kind of funny that my life is the way it is, because I have a friend and client who just had a book come out called The Thriving Family-Owned Business. It just came out a couple weeks ago.

00:13:34.160 --> 00:13:48.670 Tommy DiMisa: And it's just funny how all roads connect, and all things connect, and you talk about that background and family business, and it's just such an overlap and all the stuff. Her name is Tildette Varin. I cannot almost wait. I almost want to, like, stop the show and connect you guys right now, but we can't.

00:13:48.670 --> 00:13:49.609 Marie Davis: I gotta talk to her.

00:13:50.230 --> 00:13:51.599 Tommy DiMisa: You got… you definitely.

00:13:51.600 --> 00:13:52.230 Marie Davis: I gotta stop.

00:13:52.230 --> 00:13:52.579 Tommy DiMisa: she has…

00:13:53.020 --> 00:14:03.650 Tommy DiMisa: She has an incredible story, and we'll make sure that connection, that connection definitely happens. We're going to take a quick break, but before we do, I just want to read something. Over the next 10 years.

00:14:03.650 --> 00:14:26.659 Tommy DiMisa: More than 4 million U.S. businesses owned by retiring baby boomers will change hands or dissolve. Over the next 10 years, more than 4 million U.S. businesses owned by retiring baby boomers will change hands or dissolve. And we have another way to do that, another solution. The show is called Philanthropy in Focus. The folks from GA CEO are here. We're taking a break. We'll be right back. Philanthropy in Focus.

00:16:07.250 --> 00:16:31.540 Tommy DiMisa: Well, well, well. I've been saying it's time for a new song, and if the boy keeps sneaking out of the attic, we're gonna have to change the lyrics to that one. Join Tommy wherever the heck he happens to be during the show. That might be the new… the new line. So I shared the website while we were at break, GACEO.org, G-A-C-E-O.org. I'm actually gonna pull it up real quick so we can look at it again, because I'm really taken by the numbers. These numbers are reflective of just what's going on.

00:16:31.540 --> 00:16:42.589 Tommy DiMisa: in the state of Georgia. So, 78,326 businesses with owners aged 55 plus in Georgia. That represents 887,000 employees

00:16:42.590 --> 00:16:48.400 Tommy DiMisa: $35 billion in payroll, and $194 billion in revenue.

00:16:48.400 --> 00:17:00.200 Tommy DiMisa: Right. So, there's a lot of activity. It's funny, I was out last night, M&T Bank up here in New York invited me out to an event. Some networking, a little bit of the schmooze, the whole thing, you know, and I'm talking to some of the folks.

00:17:00.940 --> 00:17:01.970 Tommy DiMisa: And I, I…

00:17:02.620 --> 00:17:18.680 Tommy DiMisa: there's so many businesses out there that are super profitable, super revenue generation and generating, and might not be super, like, exciting and fun, right? So, like, one thing, for instance, last night, I'm talking to this gentleman who owns an HVAC business, right? And then his son comes in.

00:17:19.240 --> 00:17:37.780 Tommy DiMisa: And his son is in the roofing business. And I'm like, yeah, these things are not… I don't know if ChatGPT… if you're listening to ChatGPT, I don't know if ChatGPT is climbing on a roof and putting in shingles, right? Or doing ductwork for an HVAC company, right? So I… there's a… there's a woman,

00:17:37.780 --> 00:17:50.089 Tommy DiMisa: she's kind of… not kind of, I guess she's an influencer, and her first name is Cody, I believe her last name is Sanchez, and she's all about… you know, you know what I'm talking about, Matthew? I don't… we might have talked about her on that Zoom, but she's, like, all about, like.

00:17:50.090 --> 00:18:13.490 Tommy DiMisa: getting involved, and, you know, herself from an investment standpoint, but educating people on getting involved in these businesses. And in a lot of cases, you know, it's… she's educating people to buy these businesses, right? But what we're talking about is having the employees become the owners of these businesses. So, I want to stay on this point really quick. 78,326, you know, specifically, you on your website are calling out

00:18:13.490 --> 00:18:14.940 Tommy DiMisa: those companies with…

00:18:15.020 --> 00:18:22.430 Tommy DiMisa: with people aged 55 or older. Let's talk about why you target that from a marketing perspective.

00:18:23.270 --> 00:18:29.029 Marie Davis: Okay, and Tommy, I do want to point out, in case somebody's listening and say, why do we care about Georgia?

00:18:29.140 --> 00:18:35.679 Marie Davis: the GACEO, all the other state centers, for instance, Texas is TX CEO.

00:18:35.680 --> 00:18:36.260 Tommy DiMisa: Yep.

00:18:36.430 --> 00:18:41.049 Marie Davis: It's pretty much that way. Our parent company is Employee Ownership Expansion Network.

00:18:41.160 --> 00:18:43.570 Marie Davis: And it's EOX is the anachronism.

00:18:43.610 --> 00:18:57.170 Marie Davis: So, if you go to the EOX website, you can see all the states and click on there. Perfect. And on Georgia, it's even more interactive. You can click on each… and on the others, too.

00:18:57.170 --> 00:19:04.099 Marie Davis: Thanks to Project Equity, who did all this work, you can click on the county, and I showed this at a

00:19:04.560 --> 00:19:16.220 Marie Davis: state chamber, Georgia chamber meeting, where all the CEOs were there from all these little areas in Georgia. Georgia has 159 counties, it's so stupid, we can't figure out why. But anyway…

00:19:16.220 --> 00:19:22.750 Tommy DiMisa: What's stupid? Which part's stupid? Come on, I gotta get to the joke. It's stupid… Why do you have so many counties?

00:19:22.750 --> 00:19:35.469 Marie Davis: I… I wasn't around when Georgia was formed, but I had to learn them all in 8th grade, so believe me, I wish they'd had a whole lot less. But the point is, is that you can go to your county, and when I showed those chamber people the

00:19:36.310 --> 00:19:46.809 Marie Davis: how much was at risk with this 55 and over business? Think about these little bitty podunk towns, and this is back to the silver tsunami, what's so important.

00:19:46.990 --> 00:19:55.259 Marie Davis: They lose one mill, they lose one co-op grocery store. They lose one farmer in that town, they're cooked.

00:19:55.260 --> 00:20:16.419 Tommy DiMisa: Right, so let me ask you this. See, what you're… what I'm hearing you say is if there's not some kind of succession plan put in place, many of these companies are just gonna go, I'm good, man, I'm all set, I'm done, and on that Friday afternoon, they actually locked the door for the last time. You know, and… and where, you know, your solution is solving for

00:20:16.420 --> 00:20:22.819 Tommy DiMisa: Companies just closing down, and if they do close down, it's gonna negatively affect that community, is what you're saying.

00:20:23.630 --> 00:20:27.220 Marie Davis: That's true, and back to my personal story.

00:20:28.390 --> 00:20:34.880 Marie Davis: you know, everybody in Atlanta, at least, knew who my parents were, and knew about their business.

00:20:35.470 --> 00:20:51.700 Marie Davis: Closed doors, gone, no one knows, totally gone away. We don't want that to happen anywhere, in any state in America. We want people to know that there's another option. Now, I'm gonna let Matthew tell the story of… there's so many ways to approach this.

00:20:51.700 --> 00:20:59.350 Marie Davis: But we just had, something happen in Georgia that… I believe you have quite a few in New York. Employee Ownership Trust.

00:20:59.510 --> 00:21:04.249 Marie Davis: And I'm just gonna let him tell the story, because he really found it in the first place.

00:21:04.250 --> 00:21:04.890 Tommy DiMisa: Yeah.

00:21:05.050 --> 00:21:07.449 Marie Davis: Tag it away, Matthew. Tell this great story.

00:21:07.940 --> 00:21:22.619 Matthew Epperson: Yeah, absolutely. I mean, so, right, the Employee Ownership Trust is actually sort of our newest, you know, sort of, red-headed stepchild, you might say, just because it's the newest, right? It's just the youngest child of the sort of the three forms of broad-based employee ownership that we talk the most about.

00:21:22.620 --> 00:21:46.890 Matthew Epperson: And just a quick note there, because, you know, we use that word broad-based, that just means applying to all the employees. So a lot of your listeners might be familiar with the idea of what's called a management buyout. That's typically the most common kind of internal sale to your employees, but that's when, like, a couple of managers, like, sort of key leadership, takes ownership. So we're not usually talking about the management buyout form, we're talking about broad-based. So, just with that kind of background of the conversation, yeah, so we've got a really fantastic group

00:21:46.890 --> 00:22:02.099 Matthew Epperson: actually one of the only, probably the only employee ownership trust holding company. That's a whole other level of complexity of this conversation, and actually I want to come back to it, Tommy, because that actually comes back to what Tracy, sorry, Cody, what Cody's working on with the Main Street Millionaire.

00:22:02.100 --> 00:22:26.930 Matthew Epperson: But they've got an employee ownership trust holding company based in Utah, so it's Clegg Auto. Kevin Clegg and his brother are the owners, or originally were the single solo founder owners, you know, two brothers, and then they've got these four stores, you know, so there's auto repair and a body shop. So they've been fantastically successful in Utah, but they're looking around because, you know, they're throwing off cash, they're a very successful business, and also they're very mission-oriented and very motivated.

00:22:26.930 --> 00:22:51.699 Matthew Epperson: motivated by helping people find their why. So that's actually their biggest thing. Whenever Kevin talks about, you know, Clegg Auto, you might say, hey, this is like a mechanic shop. What is this guy talking about? He's like, you know what? Every day you come to work, I want to know what your why is, and I want it to connect back to this work, and I want to help you find it. So much so, that they had an employee who was like, okay, you know, I'm really listening to you, Kevin. I know what my why is, and I actually need to go

00:22:51.700 --> 00:22:57.190 Matthew Epperson: connect with my family in a deeper way, so I'm gonna move back to South Carolina. And you know what they said?

00:22:57.340 --> 00:23:08.020 Matthew Epperson: They're like, we're gonna make that happen, and not only that, but we're gonna let you stay with the company, and we're gonna go actually create an opportunity for you in South Carolina, so you can take Clegg with you.

00:23:08.230 --> 00:23:09.620 Matthew Epperson: Keep your job.

00:23:09.700 --> 00:23:28.129 Matthew Epperson: keep doing what you love, and be close to your family. So that's actually why we've had our first Employee Ownership Trust acquisition in Georgia, actually in Augusta, so it's right on the border. Actually, it's funny, a little bit… another strange thing about us here in Georgia, one of our cities, Augusta is actually in both states, so it's in Georgia and South… Yeah, it's in South Carolina and Georgia.

00:23:28.130 --> 00:23:41.640 Matthew Epperson: But suffice to say, yeah, that Benjamin, who we just got the honor of meeting, actually, at our employee ownership celebration on Tuesday, was the beneficiary of that. So he's actually now the manager of an auto shop. It's now called Regency Auto, based in Augusta.

00:23:41.810 --> 00:23:59.969 Tommy DiMisa: That's awesome. So, I gotta just jump in and say a couple things. See, so, back to… some folks, if you're watching the video, right behind me is… that's our… our logo for what's called the Vanguard Benefits Hall of Fame Employer Awards, which we're actually… we inducted our first class this year, and we're,

00:24:00.040 --> 00:24:16.610 Tommy DiMisa: accepting applications for employers right now. I don't usually talk too much about Vanguard benefits here on the show, but it's very relevant to what you're talking about, because what you just discussed, that's culture, man. Culture is queen, culture is king, culture is top dog, whatever it is, man. The bottom line. And when you have… his name is Kevin Clegg, you said, is that right?

00:24:16.610 --> 00:24:17.100 Matthew Epperson: That's right.

00:24:17.100 --> 00:24:26.570 Tommy DiMisa: shout out to Kevin, Clegg, and your team, and your family, and what you're doing out there, man, because you get it. You know, you just get it. And when you… when any of us re…

00:24:26.670 --> 00:24:33.379 Tommy DiMisa: Realize and reward and award our employees as the number one asset, which they are.

00:24:33.380 --> 00:24:48.599 Tommy DiMisa: then it's gonna create a wonderful culture. And you know, many folks know I spend most of my time in the nonprofit sector, so nonprofits are thinking this way all the time. For-profits are not thinking this way all the time, let's say, but the ones…

00:24:48.600 --> 00:24:56.719 Tommy DiMisa: Yeah, interrupt me one sec. The ones who do, though, the ones who get it, those are the employers of choice. Those are the Hall of Fame employers. Marie, jump in.

00:24:57.230 --> 00:25:06.030 Marie Davis: Well, I want to tell a little bit more about that story, the point about the small auto shop in Augusta that had been there for years.

00:25:06.070 --> 00:25:13.759 Marie Davis: The owners wanted to exit, they didn't know how to do it, they just wanted to get out, and so when

00:25:13.760 --> 00:25:32.949 Marie Davis: Clegg Automotive said, hey, we'd like to buy this, we're gonna leave your legacy name there, because it's been there forever in Augusta. So it's still Regency Auto, and people still know who it is, they've got this wonderful new manager, and those employees are now in a profit-sharing plan in a purpose trust.

00:25:33.080 --> 00:25:47.999 Marie Davis: And thank you to our friends at Common Trust for helping this happen. So, it's just… it's such a bigger story. People in Augusta are gonna hear about this form of employee ownership because they left the name. They know the owners aren't there.

00:25:48.460 --> 00:26:00.789 Tommy DiMisa: Yeah, yeah, but the staff, the people who've been serving the clientele, the community for years, are still there, and now they have ownership, is what you're telling me, right? Not to get into the whole.

00:26:00.980 --> 00:26:08.639 Marie Davis: holding company, and trust, and all how they have ownership. That's, like, another show, Matthew and I promise, we'll do a show just about, like, getting into the weeds.

00:26:08.640 --> 00:26:32.379 Tommy DiMisa: Because I think that's… and maybe you're… maybe you don't need me for that. Maybe you guys are already having a lot of those conversations and dialogues on social, but I… this is… a lot of this is new to me, and certainly new to my listeners. By the way, we keep talking about Atlanta, and I know my friend Robert Rosner is listening. He would watch, but he's gonna tell me he doesn't really know how to get to YouTube, or Facebook, or LinkedIn, or anything like that. So, Robert Rosner, you know, my friend for life.

00:26:32.380 --> 00:26:38.369 Tommy DiMisa: He's been in the life insurance business for, I think, 52 or 53 years. Do you know Robert Rosner? Do you two know Robert?

00:26:39.240 --> 00:26:44.850 Marie Davis: I think I met Mr. Rosner, I'm pretty sure I did, at an exit planning institute.

00:26:44.850 --> 00:27:06.880 Tommy DiMisa: Yes, yeah, you would have. Yes, that would make sense, that would raise it. So he's probably gonna text me right now, because I don't always get to give him a shout-out, but I figure if we're talking Atlanta, and I don't give him a shout-out, I'm gonna have to have an hour-long conversation and hear about it on my drive home later on Halloween, you know what I mean? So, Robert, I love you, thanks for always checking in. There's so many different things here, because that whole thing with Regency now.

00:27:06.960 --> 00:27:22.050 Tommy DiMisa: it's like, the guys at Clegg, they just really get it, you know? And that's a term I use, and I think… I think it translates to most folks, but they just get it. They're like, this gentleman you said wanted to move, go back to the fam… it was a… I think it was a… the manager's a man, right?

00:27:22.280 --> 00:27:22.710 Matthew Epperson: Yep.

00:27:22.710 --> 00:27:34.850 Tommy DiMisa: wanted to move, wanted to go back to family, and they didn't say, alright, hey, good luck, it was great, keep in touch, you know, we'll text each other. They said, no, let's figure this thing out. So, what the ripple effect of that is so far, it's infinite, don't you think?

00:27:35.900 --> 00:27:51.500 Marie Davis: It is. And so, this has worked so well that the… there are many employee-owned companies of different varieties that are doing the same thing, and the National Center for Employee Ownership, which is what people join after they become… companies join.

00:27:51.530 --> 00:28:00.380 Marie Davis: Actually, it's starting a list of companies that want to be bought by an employee-owned company, and employee-owned companies that want to buy other companies.

00:28:00.380 --> 00:28:05.450 Tommy DiMisa: Go back a minute, go back a second there. What… who is building this registry or… or list?

00:28:05.650 --> 00:28:08.259 Marie Davis: the National Center for Employee Ownership.

00:28:08.260 --> 00:28:08.960 Tommy DiMisa: Okay.

00:28:08.960 --> 00:28:22.700 Marie Davis: And they… there's about almost 7,000 employee-owned companies in this country, and I would say almost all of them belong to that, or to ESCA, and or to the ESOP Association. They're just support…

00:28:22.700 --> 00:28:30.879 Marie Davis: you know, very, very important support groups. So they realize that these employee-owned companies have money and heart, and want to

00:28:31.260 --> 00:28:48.769 Marie Davis: save these Silver Tsunami companies and their legacy. So they said, okay, rather than have companies eaten up by M&A, we're gonna have a list. And when these great companies have all this extra money because they're so profitable, or they're not paying tax, whatever the reason.

00:28:49.070 --> 00:28:55.110 Marie Davis: they can find a Regency Automotive and keep it alive, and save those jobs.

00:28:55.280 --> 00:29:11.200 Tommy DiMisa: I want to, when we come back from break, I wanna go into the technical nature of how this happens, and… and why, you know, somebody at that, kind of the autumn of the winter of their career is ready to do this. But I really want to just talk about, quickly, before we go to break.

00:29:12.230 --> 00:29:16.390 Tommy DiMisa: Can you just give me a quick one, Matthew Ormery, about…

00:29:18.820 --> 00:29:28.639 Tommy DiMisa: these organizations ended up getting stronger through this, right? Like, give me one where… because there's a video, a couple videos, I was watching the videos this morning on your website, which the website is GACEO.org.

00:29:28.840 --> 00:29:35.030 Tommy DiMisa: But… Like, they get better, they're stronger, they're more profitable. Matthew, hit me with something on that.

00:29:35.770 --> 00:29:51.299 Matthew Epperson: Yeah, I mean, so one of our first worker co-ops here in Georgia is a farm that I much love called Love is Love Cooperative Farm. And, you know, so originally they were just the five founding member farmers, and now they've grown to 20 employees. So they've been able to fantastically grow their company, grow their CSA, grow their sales.

00:29:51.300 --> 00:30:00.780 Matthew Epperson: Absolutely, so everything gets stronger. It's longer tenure of those employees, it's more sales, happier employees, they stay longer, so yeah, it's all the things.

00:30:00.780 --> 00:30:05.080 Tommy DiMisa: It just sounds… and again, in a time where,

00:30:05.860 --> 00:30:13.780 Tommy DiMisa: There are many large companies in this country that don't do the right thing by their employees, and maybe not just this country, let's just say the whole planet, that don't do the right thing by their employees.

00:30:14.210 --> 00:30:25.090 Tommy DiMisa: Employee ownership, equity. I mean, listen, I've been a business guy for a long time, I've been in sales for a long time, and when I worked for big companies, the thing that always killed me was I'm growing somebody else's business, man, right?

00:30:25.090 --> 00:30:34.270 Tommy DiMisa: But it was the deal, it was what I signed up for. I got a check on the 15th and 30th, they paid for my health insurance, some money in the 401K. I understood what it was, but I didn't like it.

00:30:34.320 --> 00:30:50.700 Tommy DiMisa: What we're talking about now is you, literally, every… every apple you pick, right? Every widget you make, every unit you sell is going to something that you have equity and ownership in. That is game-changing, just… just the… the mental piece on it.

00:30:51.200 --> 00:31:03.850 Matthew Epperson: Yeah, let me hit you with this, Tommy. So one of the architects of our movement is this attorney named Louis Kelso, and so one of his most famous quotes was, the problem with capitalism is that there aren't enough capitalists. So what he was trying to say was, we're not sharing the ownership right.

00:31:03.850 --> 00:31:05.749 Tommy DiMisa: Not enough people to play the game.

00:31:05.750 --> 00:31:10.000 Matthew Epperson: We're doing this wage thing, we're not doing this capital sharing thing. Absolutely.

00:31:10.000 --> 00:31:10.800 Tommy DiMisa: Yeah, and what's just…

00:31:10.800 --> 00:31:12.560 Matthew Epperson: It aligns those incentives, yeah.

00:31:12.560 --> 00:31:15.959 Tommy DiMisa: Yeah, for sure. Do you find that,

00:31:16.370 --> 00:31:29.189 Tommy DiMisa: I'm not… I'm not trying to beat up some of the… what would have been called in this country the oligarchs, but the bottom line is, there are people who have tons and tons of dough, and then there's so many people who have nothing, right?

00:31:30.110 --> 00:31:34.889 Tommy DiMisa: this never makes it to, like, the highest level of companies, right?

00:31:34.900 --> 00:31:47.950 Tommy DiMisa: You know, I mean, you can always have… you can have stock options and things like that, and… but it… this type of program… and I say… that was more of a question. Does it ever get that high, right? Am I ever gonna… I mean, I can own shares of Amazon, and I do.

00:31:47.950 --> 00:31:55.189 Tommy DiMisa: But if I work there, that's not going to be the same dynamic of a company that has 150 employees and everybody has a piece, correct?

00:31:56.800 --> 00:32:04.209 Marie Davis: Right, and so I… I… there's very many really large employee-owned companies in this country.

00:32:04.210 --> 00:32:04.880 Tommy DiMisa: There are, okay.

00:32:05.290 --> 00:32:10.700 Marie Davis: But the biggest one with most employees is Publix grocery stores.

00:32:10.700 --> 00:32:11.360 Tommy DiMisa: How many employees?

00:32:12.440 --> 00:32:15.779 Marie Davis: About… isn't it about $300,000, Matthew?

00:32:15.780 --> 00:32:16.849 Tommy DiMisa: That's right, yep.

00:32:17.050 --> 00:32:19.490 Tommy DiMisa: There you go. So I stand corrected. There you go. Okay.

00:32:19.490 --> 00:32:35.719 Marie Davis: Okay, so the checkout, there are parameters around employee ownership. Maybe you have to have been there 6 months, or you have to work 20 hours, whatever their ESOP is set up to be, and they aren't… 80% employee-owned right now? Okay.

00:32:35.890 --> 00:32:47.070 Marie Davis: the checkout girl is not gonna make as much as the manager, but over time, she… she's gonna build up her retirement, and I shouldn't have said she, I don't know why that came out of my.

00:32:47.070 --> 00:32:49.420 Tommy DiMisa: Because you said checkout girl, so it's okay, so it is…

00:32:49.420 --> 00:33:04.399 Marie Davis: But anyway, so the manager is always going to have a bigger salary, but the longer that girl stays there, woman, whatever, she's gonna build up that ESOP by the profitability in the company, and she's not gonna have to worry whether she has Social Security or not.

00:33:04.400 --> 00:33:14.739 Tommy DiMisa: Yeah. Is that in addition… yeah, real quick, sorry, real quick. Is that in addition to traditional, like, 401K and other things like that? And if… That's right. Yeah, okay, good. So that's good.

00:33:14.740 --> 00:33:18.849 Marie Davis: 401Ks and an employee-owned situation.

00:33:18.850 --> 00:33:19.480 Tommy DiMisa: Yeah.

00:33:19.920 --> 00:33:27.869 Tommy DiMisa: That's what I was asking. All right, we're gonna do this. You know, part of my show is I never take breaks on time, so that's what we did again. All right, let's take a quick break. Show's philanthropy and focus, right back.

00:35:06.960 --> 00:35:31.380 Tommy DiMisa: You know, I'm all about solving problems, right? It's what it is, so solving problems. So here's what we're gonna do. I have just renamed my office The Attic. So now, you can join me in the attic. So my office inside of our suite is now called The Attic as well. So see, I tricked the whole universe. That's how fast I operate. It only took two segments for me to figure it out. All right, let's do this. I want to play a game. I wrote this in the chat for you. Let's hit this story. The employer group has options, right? So this employer

00:35:31.380 --> 00:35:44.070 Tommy DiMisa: let's call them whatever name you two come up with, and you… then let's play it out. So they have been in business X number of years, this is what they sell, this is what they produce, and this could be, if you want to.

00:35:44.070 --> 00:35:48.100 Tommy DiMisa: Totally a real story. I want to take it from when

00:35:48.240 --> 00:36:07.119 Tommy DiMisa: you start talking to them and engaging with them, or rather, when they start to engage with GACEO, what that looks like, because I'm on the website now, and you have Employee Ownership 101, Become Employee Owned, so there's information there, talk to a Professional, so we'll go into all that, but talk to a professional, then there's tabs for accounting.

00:36:07.120 --> 00:36:21.479 Tommy DiMisa: business appraisal, so it's talking about different industries and things like that, right? Or actually, different services, I would say, for somebody who's looking to talk to a professional in this space. Legal, leadership development. I am so jazzed about you being on this show.

00:36:21.580 --> 00:36:40.989 Tommy DiMisa: However, I'm even more fired up about, like, the meetings we're gonna have after this show, because I have, like, 19 people I need to connect you with, and I always have to go, dude, you're doing a show right now, you're not networking, so… but those who listen already know how that happens. So let's play a story out. I will follow your lead, and I'll just ask questions as you take us there.

00:36:41.220 --> 00:36:43.970 Marie Davis: Yeah. Maria, were you there with Joma at the beginning?

00:36:45.050 --> 00:36:49.620 Marie Davis: No, but that's a great story. So,

00:36:51.000 --> 00:36:57.290 Marie Davis: we could talk… let's talk about JOMA, because they almost don't fit the model for… this would be a good one, because

00:36:57.400 --> 00:37:01.319 Marie Davis: They are right there in Athens, where Matthew is.

00:37:01.430 --> 00:37:20.349 Marie Davis: And they are a niche construction company. They have between 25 and 30 employees, and I'm not going to talk the whole time, I promise, Matthew, because he knows them very well, but they didn't really fit the traditional employee stock ownership plan, and here's why.

00:37:20.450 --> 00:37:22.230 Marie Davis: They don't have enough employees.

00:37:22.230 --> 00:37:25.620 Tommy DiMisa: What do you… what's the… how many do you need for it to work, typically?

00:37:25.910 --> 00:37:27.699 Marie Davis: At least 25, and that's what.

00:37:27.700 --> 00:37:28.790 Tommy DiMisa: Oh, okay.

00:37:28.980 --> 00:37:37.639 Marie Davis: But they… they… that's iffy. And the reason they did qualify was because their workforce is very young, because…

00:37:37.640 --> 00:37:38.370 Tommy DiMisa: Okay.

00:37:38.370 --> 00:37:41.110 Marie Davis: They went 100% employee-owned, which is…

00:37:41.830 --> 00:37:51.330 Marie Davis: I'm sorry, I gotta jump to this, because we're… our real goal is to get to founders, such as the founder of JOMA, John Newland.

00:37:51.790 --> 00:37:54.790 Marie Davis: before they get old and gray and they want to get out, because Mr.

00:37:54.790 --> 00:38:06.519 Tommy DiMisa: So what… what age is that? So how many years… if I'm… let's say I own an insurance agency, and I'm 47 years old, right? And I go… I want to be out at 57, let's say. Like, should we be talking already, or, like.

00:38:06.520 --> 00:38:08.640 Marie Davis: Oh, when you set up the business.

00:38:08.640 --> 00:38:28.790 Tommy DiMisa: Okay, even better. From the jump, right? You know, start with the end in mind, right? Yes. So how am I getting out of this thing? Right? And again, our businesses become personal, they're a legacy, however, it's just a vehicle at the end of the day, right? So we gotta make sure to keep this vehicle in good shape and shine it up nice, so maybe somebody wants to buy it off us, right?

00:38:29.140 --> 00:38:29.910 Marie Davis: That's right.

00:38:29.910 --> 00:38:31.159 Tommy DiMisa: Or otherwise, yeah.

00:38:31.160 --> 00:38:45.489 Marie Davis: We've got a great article from the National Center for Employee Ownership called, Who Should Own Your Business After You? And if we can get people to think on the entrepreneur side, or at least when they're like Mr. Newland, really young, he's, I don't know, Matthew 44?

00:38:45.510 --> 00:39:00.219 Marie Davis: 40s? Early 40s? He's 100% employee-owned, he's got all these wonderful tax benefits, and those employees aren't going anywhere. They are dedicated to him, they've got a long time in the workforce, so that's what made it right for them.

00:39:00.220 --> 00:39:11.309 Marie Davis: Because they got a young workforce, they're not having to pay out retirement anytime soon for all those employees. So, that's what makes the center so important, is that, let's say it's a co-op.

00:39:12.530 --> 00:39:22.559 Marie Davis: I'm not a co-op person, I'm learning, but I'm gonna call up Matthew, who's the expert, and say, talk to this company with me, because they're interested in that model. So…

00:39:23.550 --> 00:39:29.939 Marie Davis: Joma would be… if they had come to us first, which they did not, but that… they didn't know about us.

00:39:30.080 --> 00:39:37.900 Marie Davis: So, we would have them speak with other employee-owned firms in the construction business, and small firms.

00:39:38.380 --> 00:39:42.649 Marie Davis: If they were interested in being a co-op, Matthew would have been my first call.

00:39:43.200 --> 00:39:46.740 Marie Davis: And so, we give them those options and say.

00:39:46.850 --> 00:39:49.709 Marie Davis: what is your ultimate goal here?

00:39:49.710 --> 00:40:02.419 Tommy DiMisa: Let me stop you, let me stop, because I want to understand, because I'm… I'm getting a little bit lost in the acronyms and stuff like that, so I think others might as well. So can we just define a couple terms, like ESOP, co-op, and then… Matthew, you want to hit those on tech side?

00:40:03.350 --> 00:40:15.720 Matthew Epperson: Yep, absolutely. So, it's interesting. Maybe the easiest way to think about it is sort of, like, the difference between direct and indirect employee ownership, and what I mean by that is there's indirect employee ownership because there's some kind of, an instrument, it's a legal instrument called a trust.

00:40:15.760 --> 00:40:27.809 Matthew Epperson: So if there's a trust that actually takes ownership of that business, usually gradually, but it could be all at once, like kind of Maria's saying with Jomo, where it suddenly became 100% owned. It could also be in parts, so that's an important part for the audience to understand.

00:40:27.810 --> 00:40:35.769 Matthew Epperson: But if it's mediated by a trust, right, so there's some kind of a legal vehicle that's taking that ownership, and then it sets it up so that the employees are beneficiaries of the trust.

00:40:35.770 --> 00:40:53.240 Matthew Epperson: So that's how they exercise their ownership, is that over time, the increasing value of the company gets reflected in things like the value of their ESOP account, which is, again, is a retirement account. So that's what's crucial to understand about an ESOP, right? So it's a qualified retirement plan, similar to a 401 , but it's unlike your 401K that's invested in lots of companies.

00:40:53.240 --> 00:40:57.380 Matthew Epperson: Aesop has just invested in your company, so it's only one, right?

00:40:57.380 --> 00:40:58.939 Matthew Epperson: So that's, that's the ESOP.

00:40:58.940 --> 00:41:19.229 Matthew Epperson: The worker cooperative, these can be any size, so the other two, you know, but this is getting to be direct ownership, right? So with the worker cooperative, this is where each employee has a direct share, they have a named account that's in their name. They're sharing profits usually on an annual basis. They distribute profits in a very particular way that fits a cooperative called a patronage dividend.

00:41:19.230 --> 00:41:32.719 Tommy DiMisa: But it's a direct ownership, right? But let me stop… let me stop you there, just to get… get clear on this. So, the first example is where there's actually, like, it looks… there's a structure, like a… you call the trust, like a 401K, like, there's…

00:41:32.720 --> 00:41:52.139 Tommy DiMisa: the assets are being managed, it's separate and apart, and that's for, like, I can access that down the road, versus this other, the cooperative, is on an annual basis. I, as a worker in the cooperative, I'm getting, you know, my quote-unquote share of the profit on a regular basis, yes?

00:41:52.140 --> 00:41:52.530 Matthew Epperson: Correct.

00:41:52.530 --> 00:41:57.639 Tommy DiMisa: Okay, got it. So that's very different, so cool, good, I'm good. Please, continue.

00:41:57.640 --> 00:42:13.900 Matthew Epperson: Yeah, absolutely. And that's another piece of it, too. So it's not as heavily regulated, right? Because any kind of qualified retirement plan, that means there has to be what's called a third-party administrator. I'm sure you and your guests probably are familiar with the TPAs, so there has to be also, like, a trustee, so a trustee has to represent that trust.

00:42:13.900 --> 00:42:20.779 Matthew Epperson: So that wouldn't be the case with the worker cooperative. So it can be more directly representative in the sense of, like, those employees can serve on that board of directors.

00:42:20.780 --> 00:42:34.509 Matthew Epperson: That could be the level of governance oversight, so it doesn't have to be any kind of a trustee in that relationship. And then the third and final kind that we've mentioned previously, which was Clegg Auto, that's the Employee Ownership Trust. So this is also an indirect ownership, so there is a trust, there is a trustee, but.

00:42:34.510 --> 00:42:40.489 Tommy DiMisa: So I own part of the… I own the trust, and the trust owns the… the business, is that for… for layman's terms?

00:42:40.490 --> 00:42:55.900 Matthew Epperson: Yes, although the interesting, important piece about the EOT is that these are, naked in, naked-out transactions. So what that means is you actually don't have an individual share, so some people can test that word ownership with the EOT, because they're like, well, if I don't have a share in my name, is that really ownership?

00:42:55.900 --> 00:43:02.689 Matthew Epperson: We think it is, and that's because of the culture that they're creating, right? Because that's what, like, Clegg Auto, like, they're creating that culture of ownership.

00:43:02.690 --> 00:43:12.309 Matthew Epperson: And they participate much more frequently, like the Worker Cooperative. So the EOT almost feels like the baby, right, between the two. Like, if Aesop and a worker co-op had a baby, it feels like an EOT in many ways.

00:43:12.740 --> 00:43:32.219 Tommy DiMisa: Okay, so, alright, so let's go back to this real quick. We get this, and we're gonna have to take a break in 2 minutes, but… so let's get some of this in. We come to somebody, or they come to the GA CEO, and they're like, I heard about this, I think it's a great option, this is my way out, because I love my people, I want to take care of my people, and I'm not ready to go yet, either, and I also…

00:43:32.220 --> 00:43:44.119 Tommy DiMisa: don't want somebody to come in and close the place down, or come in and move the factory to Des Moines from Long Island, or whatever. No disrespect to Des Moines, just don't move the factory, because most people can't move to Des Moines.

00:43:44.120 --> 00:43:45.759 Matthew Epperson: They've already got good stuff in Des Moines, yeah.

00:43:45.760 --> 00:43:57.449 Tommy DiMisa: It's probably less expensive than trying to live here on Long Island, so maybe you want to go to Des Moines. I don't know, sorry. Anyway, so, like, what does that happen? They reach… they reach out to you, what's that first engagement? Let's do 2 minutes on it now, and then we'll take a break.

00:43:58.480 --> 00:44:21.929 Matthew Epperson: Yeah, I mean, so that conversation, right, so we're coaching that business owner and just trying to get to the heart of the story for them, really. It's like, what is that legacy that they want? What is their motivation? What is their timeline? What level of, you know, sort of, you know, because oftentimes the business is sort of the single most important asset that somebody owns if they're a small business owner. Oftentimes that means that's their retirement plan, right? So we have to set up a financial situation where the sale of that business will.

00:44:21.930 --> 00:44:31.430 Tommy DiMisa: will carry them through, like, other types of retirement options. Right. It also preserves that company, just like you said, Tommy D. You know, like, we just gotta keep those employees there, we want to keep this culture in place.

00:44:31.430 --> 00:44:33.470 Matthew Epperson: We don't want to sell it, we don't want to strip for parts.

00:44:33.470 --> 00:44:52.220 Matthew Epperson: let's preserve all that. So, we want to talk to that business owner, and then get them on the path, right? So the professionals you were looking at at the website, they're the ones who will help actually structure the deal. They'll go through more of the technical and the logistics of it, right? So we need attorneys and exit planners and estate planners. We need these folks to do a lot of that, you know, technical work.

00:44:52.220 --> 00:44:55.300 Matthew Epperson: But we'll be the ones kind of cheerleading them along the way.

00:44:55.520 --> 00:45:04.829 Tommy DiMisa: I love that. And Marie, jump in, because I felt like you had something to say. The website, everybody, is GACEO, and I'm showing you that if you're watching right now, this piece called Talk to a Professional. Marie, add to that if you had something.

00:45:05.410 --> 00:45:17.249 Marie Davis: Oh, well, I do, and I think the important distinction, too, is what Matthew was saying about the employee stock ownership plan as a retirement plan, but unlike a 401 ,

00:45:17.400 --> 00:45:27.440 Marie Davis: there's no limit to what that the… it's the profits of the company that can go into the ESOP. Also, a common misnomer is that

00:45:28.190 --> 00:45:41.479 Marie Davis: the employees have to pay for it. The employees pay nothing. They can't. It's illegal. The company puts the profits in the stock ownership plan and into the other entities. Also, they… they don't…

00:45:41.480 --> 00:45:54.840 Marie Davis: traditional employee ownership plan, they don't have a vote. The board, just like any other company, the board sets it. Now, they might have a 401K where they can contribute, and the company contributes.

00:45:54.850 --> 00:45:58.439 Marie Davis: But an Aesop is a gift to an employee. It's…

00:45:58.810 --> 00:46:01.330 Marie Davis: Really, they can't pay for it, and.

00:46:01.330 --> 00:46:12.329 Tommy DiMisa: Now, there's a thing about… sorry to interrupt. There's a thing about taxation, right? Can you hit that part real quick, or… or do you want to… is it gonna… Matthew, can you do in 30 seconds about how that affects the seller real quick before we go to break?

00:46:13.240 --> 00:46:28.660 Matthew Epperson: Yeah, no, quickly. Right, so there's a couple of different kinds of tax, one of which, probably the most important is capital gains tax. So we can actually 100% defer capital gains tax with what's called a 1042 rollover, and that works for two of the three types. So that's… that's the ESOP, and the worker co-op can both take a 1042 rollover.

00:46:28.970 --> 00:46:53.949 Tommy DiMisa: Perfect. That's great. All right, good to know. Maybe we'll get more into that in the final segment. We come back in the final segment, I want to talk about what is the organization offering from the perspective of technical assistance? More so, you know, there was things we talked about, Marie, the other day, about webinars we can do, maybe with some CFPs, maybe some financial advisors, attorneys, different people like that. I will be, probably after the new year, be down in Atlanta visiting some folks, so I want to come… I mean.

00:46:53.950 --> 00:47:18.880 Tommy DiMisa: you're talking about all these cool CSAs and non-profit things going on. I'm like, oh my god, man, I gotta… I gotta get down there. We gotta figure this out. I got some people down there in Dunwoody, like I've said. All right, so I actually have this, this hoodie that says Funwoody on the back. There's, like, this little place. So, anyway, gang, if you don't know, I don't know what to tell you. All right, so we will be right back. Philanthropy Focus, we'll bring it home. You tell me what's upcoming. How do we… I just shared something. You had something, earlier this week.

00:47:18.880 --> 00:47:42.819 Tommy DiMisa: the 28th, which was the same day of the Long Island Imagine Awards, plus it was 400 miles, or 500 miles from where I was anyway, so I wasn't going to be there. But I want to hear about that, because there's something I need to tell you all about, and we'll talk about it on Wednesday, but Sattel Institute, Sattel Institute, the three of us need to talk about next week, they're going to be doing some work down in Georgia as well, and it's a fully funded nonprofit organization focused on corporate social responsibility.

00:47:42.820 --> 00:47:54.000 Tommy DiMisa: I'm collaborating with them as an executive liaison, so we can talk about that when we're all together, but I figured I'd put it out there because others should check out Sattel Institute. Break time, Tommy! We'll be right back.

00:49:24.800 --> 00:49:39.820 Tommy DiMisa: This particular Friday, I did the long walk from my car to the new attic. Stop being silly, Tommy, just run the show. Okay, fine. Alright, let's go. We're in the new attic, let's go. Tommy D, philanthropy and Focus. Hit me up on email, TommyD at philanthropyandfocus.com.

00:49:39.820 --> 00:49:50.360 Tommy DiMisa: If you want to learn more about all the cool stuff I'm doing, the cool people I'm interviewing. What's upcoming for the organization, and what is this from, like, from a national perspective and from a local perspective?

00:49:50.390 --> 00:49:59.809 Tommy DiMisa: what are some of the resources, other than, like, the technical assistance, which we talked about, how do you partner up with, like I said, CFPs, things like that, like we talked about? Take that away. Whoever wants to start.

00:50:01.130 --> 00:50:02.540 Matthew Epperson: Yeah, well, this is a good segue.

00:50:02.540 --> 00:50:06.619 Marie Davis: Talk about the Ambassador and the… and the Exit Pro, if you would.

00:50:06.620 --> 00:50:23.169 Matthew Epperson: Yeah, I was gonna say, that's kind of the confluence of the two, right? So we've got a program coming up called the Employee Ownership Ambassador Program. So this is a chance over… it's a 4-week free training, so it's one hour live, and then we've got some online, you know, sort of asynchronous learning that we do as well, that kind of put together about 8 hours in total.

00:50:23.170 --> 00:50:33.499 Matthew Epperson: But yeah, the idea is that if it's a CFP or Certified Financial Planner, if it's a SEPA, you know, Certified Exit Planner, CPAs, we're actually super excited about CPAs coming to join us.

00:50:33.500 --> 00:50:40.130 Matthew Epperson: So it's a chance for our professional community to learn more about the ins and outs of these three types of employee ownership that I was just explaining.

00:50:40.130 --> 00:50:59.800 Matthew Epperson: And I really love the way that we do that, Tommy. So basically what we do is we always pair a business owner who's actually gone through the transition, they've lived it, they did it, with a service provider who actually helped them on the technical side. So we kind of… we always want to pair those two together, like the lived experience and somebody who does it professionally, to really explain it and bring it home for people of, like, what is it, why are we doing it, how are we doing it?

00:50:59.800 --> 00:51:09.260 Matthew Epperson: So that's what we'll do for 4 weeks, and that's in November, starting November 6th, and it's totally online, so if any of your listeners want to join us, it's, the website is athletes.gaseo.org.

00:51:09.660 --> 00:51:15.160 Tommy DiMisa: Perfect. Alright, good. Athens… dot GACEO.org.

00:51:15.160 --> 00:51:15.680 Matthew Epperson: That's right.

00:51:15.680 --> 00:51:19.129 Tommy DiMisa: I just want to call it out again for folks. We'll put it with the,

00:51:19.470 --> 00:51:35.350 Tommy DiMisa: you know, the description here on the program and the program notes, and everything like that. But let's talk about, really, who they would connect with if they want more information. Marie, is it you? Matthew? Marie, tell us… tell me about that. How do we get connected? Obviously, you go to the website, as we talked about, but what other ways?

00:51:35.670 --> 00:51:47.549 Marie Davis: So, Matthew, is… was… we coerced him into working with us. He's a contractor, but he is hired to specifically run the Athens,

00:51:47.880 --> 00:51:55.950 Marie Davis: project, which was on ARPA funds. And because Matthew is so well known in the industry, and just very, very,

00:51:56.070 --> 00:52:15.159 Marie Davis: knowledgeable. He helps me in all kinds of areas, but he is specifically hired for the Athens area, so he's running this ambassador program, but again, it's online, anybody can do it, and I want him to talk about the Exit Pro 101, which is a continuing ed program for CPAs and SEPAs.

00:52:15.160 --> 00:52:18.860 Marie Davis: It's a free event, one hour, and it… it gives them…

00:52:19.220 --> 00:52:25.050 Marie Davis: The… a deck of information about how to talk to their their customers.

00:52:25.050 --> 00:52:26.470 Tommy DiMisa: Because they…

00:52:26.550 --> 00:52:28.050 Marie Davis: don't know.

00:52:28.520 --> 00:52:34.649 Tommy DiMisa: Exit Pro… Exit Pro 101, and it's really how to speak to customers, you were gonna say, Marie? Sorry to interrupt you there, is that what you said?

00:52:34.650 --> 00:52:52.370 Marie Davis: Yeah, so, we want CPAs, let's just say a company comes to their CPA and says, we need secession planning. If the CPA doesn't know anything about employee ownership, they're going to send them to, you know, an M&A person, or, you know, will…

00:52:52.610 --> 00:53:09.350 Marie Davis: a lawyer or whatever, we want them to know about employee ownership and that we exist, so if they come to us, we're going to put them with professionals. And so it is a free… continue again, if there's anybody listening that's a CPA or a SEPA, they can contact me, or

00:53:09.480 --> 00:53:17.630 Marie Davis: really, they should probably just go to the GACEO website, because Matthew's gonna get it anyway, it doesn't matter, we're working very closely together.

00:53:17.800 --> 00:53:21.649 Tommy DiMisa: I love that, and Matthew, hit me with that exit program, please.

00:53:22.120 --> 00:53:28.009 Matthew Epperson: Yeah, absolutely. So, you know, if the ambassador that I was just kind of explaining was sort of the drip coffee, then Exit Pro's the espresso.

00:53:28.010 --> 00:53:52.430 Matthew Epperson: So it's the one-hour hit, so it's gonna give you the deep dive as quickly as we possibly humanly can. And it's really tailored, just like Marie said, toward professionals, and so we wanna… there, we're really emphasizing the way that we're… we become a value add for your toolbox as a professional. You're already doing small business advising, you already do some kind of succession planning, you're talking to small business owners. We want to put employee ownership in your toolbox and make it another thing you can offer your clients.

00:53:52.620 --> 00:53:56.880 Matthew Epperson: You don't have to become the NBA, but you'll be ready. You'll be ready.

00:53:56.880 --> 00:54:15.269 Tommy DiMisa: Yeah, I think that's, like, I think it's critically important there. I mean, listen, this is not conversations that I'm involved with, but I'm super curious. I would want to plug into this information. Why? Because it makes me more of an asset to the people in my community. I'm out at this M&T Bank event last night, and I run into a CPA who I hadn't seen in years, whose business card's right here on my desk, because I got to send him an email.

00:54:15.270 --> 00:54:26.580 Tommy DiMisa: So, like, that's… now, if I know this, I now can have a more interesting, informed conversation with somebody. It doesn't mean I'm gonna set them… set somebody up in an ESOP, not what I do, but I can go, what do you know about this?

00:54:26.580 --> 00:54:34.640 Tommy DiMisa: You know what I just learned? And that's where I think we become really valued, trusted advisors to each other. I have a friend of mine who referred me two pieces of business this week.

00:54:34.640 --> 00:54:49.580 Tommy DiMisa: And she is a CPA, and she is in Georgia. So this is just what happens, and we'll make that connection. But, like, my point of being deliberate, like, with my speech there is to say, of course, like, that's it.

00:54:49.580 --> 00:54:59.799 Tommy DiMisa: You know, Robert Rosner, who we talked about earlier, life insurance guy for many, many years. Ridiculously connected to people in the community down there, knows many, many people.

00:54:59.820 --> 00:55:06.459 Tommy DiMisa: like me, likes to learn, likes to be educational for others, right? So the more we know, the more we can impact other people.

00:55:06.520 --> 00:55:14.759 Tommy DiMisa: anything specific that, like, on a national basis, like, I know the thing you had recently, just this week.

00:55:15.280 --> 00:55:21.140 Tommy DiMisa: Is there a national convention that folks should plug into? Like, what about that kind of stuff?

00:55:21.460 --> 00:55:39.069 Marie Davis: We're in the process of… we will be planning a regional… some regional events next year, but if they're really interested in employee ownership, get involved with one of the state centers, because, for instance, the Ohio Center has a lot of conferences, the Georgia Center's too young, but…

00:55:39.810 --> 00:55:55.510 Marie Davis: You, you asked me about, and I know we're running out of time, but you asked me about the event we had this week. October is Employee Ownership Month and Cooperative Development Month. So every year we have an event, and our partners this year, we had the President of the Georgia Chamber come

00:55:55.510 --> 00:56:02.959 Marie Davis: come and speak. It was phenomenal. We had it at a very Georgia institute called the Russell Innovation Center for Entrepreneurs.

00:56:03.020 --> 00:56:18.719 Marie Davis: We want to get in front of all those entrepreneurs. We had someone come and do ESOP 101. They were supposed to do Co-op 101, but we never got there. But, we presented awards to the new companies. Clegg Auto came all the way from Utah.

00:56:18.720 --> 00:56:26.619 Marie Davis: to receive the award. And so, you know, and I think Matthew just put in the chat, Austin, Texas, our

00:56:26.740 --> 00:56:36.230 Marie Davis: Texas Center is having their first regional… so, you know, just connect with me, let me know where you are. Matthew and I will help you find an event wherever you are.

00:56:36.880 --> 00:56:37.900 Marie Davis: Yeah, very…

00:56:38.030 --> 00:56:43.440 Matthew Epperson: Yeah, it's a very collaborative ecosystem, so yeah, even if you're not in Georgia, we'll definitely get you in touch with the right folks.

00:56:43.440 --> 00:56:44.610 Marie Davis: Oh, absolutely.

00:56:44.850 --> 00:57:00.670 Tommy DiMisa: Yeah, and well, isn't that networking? I mean, I am the nonprofit sector connector, so this is what I'm all about, man. I'm also the for-profit sector connector, but, you know, that wasn't specific enough, so I went, I went and told and named myself this. Who knew that it would be a thing? People introduce me that way now, and it's just, it's how it's…

00:57:00.670 --> 00:57:10.420 Tommy DiMisa: it happened, you know? Listen, we're gonna leave it there. This has been an awesome interview. It's been an awesome conversation. I mean, these are never really interviews, they're conversations, you know? And it's just…

00:57:10.420 --> 00:57:34.120 Tommy DiMisa: I learned so much. One week it's… it's a food pantry, the next week, it's an organization serving people with intellectual developmental disabilities, the next week it's a… it's a… it's Project NYC, empowering young people in Queens, part of New York City, for those of you who don't know what that is, Queens. Let's go Mets, by the way. Now, my friends in Atlanta are like, Tommy, really? We're gonna… you have the Mets hat on the whole time, and now you're gonna say, let's go Mets at the end of the show. Anyway, Marie Davis.

00:57:34.120 --> 00:57:48.479 Tommy DiMisa: Matthew Epperson, I appreciate you both. We're gonna do some fun stuff together. I'm excited to know you. I'm only as strong as the power of the connections and relationships I have. Shout out to my friend Kathy Smith, who made this introduction and connection. Final words, anything you gotta say before you go?

00:57:50.150 --> 00:57:51.909 Marie Davis: Thank you so very much.

00:57:52.220 --> 00:57:54.199 Matthew Epperson: We're stronger together. Appreciate you, Tommy.

00:57:54.200 --> 00:58:01.210 Tommy DiMisa: You're welcome. Yes, we are stronger together. Make it a great day, everybody. I am the one and only the Nonprofit Sector Connector. I'll see you next week. Bye.

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