Jeff Bolstad — a driver for Long Haul Trucking, an employee-owned company in Albertville, Minn. — has found the last several years particularly enriching.
Bolstad saw the value of his stake in the company rise 63% since to 2019 to $144,00, money to which he is entitled on top of his 401(k) retirement funds.
"I'm going to stay in the company as long as I can," said Bolstad, who is 62. "I love this company."
Long Haul turns over only a quarter of its drivers annually. This in a driver-short industry, buffeted in 2020 by COVID-19 and turnover last year of around 90% for large carriers, according to the American Trucking Association.
Long Haul was profitable last year on about $95 million in gross sales delivered by its 350 employee-and-contract drivers.
Employee-owners are 50% less likely to be laid off in recessions, according to the Rutgers University Institute for the Study of Employee Ownership.
Long Haul paid out a flat, guaranteed salary to drivers worried about reduced hours and smaller paychecks.
"We have low profit margins because of the amount" of revenue-sharing with drivers, said Chief Executive Jason Michels, 45, who began as a driver in 1999 before working in dispatch and administration. "But our sales have increased 56% since 2013. That's better than our industry. And our profit margin has increased by a couple of percentage points since 2013."
Management and employees credit the owner's long-time strategy of paying wages that range now to $75,000 a year for full-time drivers — and selling the company to workers in 2013.
Founder-owner John Daniels considered a rich offer for the business from a national trucking company. But he decided instead to sell it to an employee stock ownership plan.
"I made a lot of mistakes over the years," said Daniels, 65, a veteran trucker who started Long Haul in 1988 in a Maple Grove basement. "That wasn't one of them. And these guys are killing it. That makes me smile.
"It turned out well for me [financially]. But it wasn't all about the money. It's the peace of mind and the reputation of Long Haul. And keeping things rolling as they had been."
Long Haul pays out a high percent of revenue; up to 87%, not including surcharges, to independent operators who own their own trucks. The company that offered to buy Long Haul paid less than 75%.
"I would have gotten a lot of backlash and that wouldn't sit well with me," Daniels said about the other offer.
He added he also worried about the futures of long-time colleagues.
"The success of Long Haul over the years was due also to the people who were with me," he said. "And key people like Jason and Tiffani Steinke, our CFO, and others would have lost jobs or had to move out of state. That's what happens in consolidation."
Long Haul's general counsel had approached Daniels with the idea of selling the company to an ESOP (Employee Stock Ownership Plan). It can take years, isn't cheap and must be done conservatively to work well and not strap the company with debt.
An ESOP company must grow to finance the acquisition of shares. And management must be candid and educate and inform employees every step of the way.
"The ownership mentality takes over the employees," said Michels. "Their daily work is not just the company but investing in themselves and each other. They see the value in their retirement accounts. Many individuals have six-figure retirement accounts already. Everybody with [over 15 years] has a six-figure balance. This leads to more collaboration.''
The company provides free coffee, at the request of the employees. But that expense has been paid back many times over from money-saving ideas of workers in the office, drivers and dispatchers.
"A lot of employees found a new gear … when they started getting their ownership statements," Daniels said. "They worked harder, I believe.
"Before the ESOP ... I never saw a dispatcher send out a group e-mail that said: 'Hey I got all my trucks covered. Does anybody need help?' It's been great for the people and fun for me to watch. Every year the profit sharing has gone up. At the end of the day, I will take that over the extra money I would have made selling."
Minnesota has about 275 employee-owned companies, the highest number per capita in the United States, said Sue Crockett, executive director ofMinnesota Center for Employee Ownership.
"Most ESOP companies are found in the manufacturing sector," Crockett said. "Long Haul … shows that companies in any industry can be successful with an ESOP."