Becoming a 100% Employee Owned Company
As of January 1st, 2015, TPI Hospitality will transition to an Employee Stock Ownership Plan, or, ESOP. That means you and your co-workers will be the new owners of the company! Does this sound too good to be true? Read on…
Tom Torgerson, who joined TPI in 1979 and is the current owner and CEO, wants to transition the company into an ESOP and in turn reward the associates who have helped build TPI into the largest and most respected hospitality company in Minnesota. This transition will provide long-term incentives to all TPI associates and ensure that the company lives on far into the future.
How will the new ESOP affect TPI? In essence, it does not change anything from an operational standpoint. The entire current leadership team remains in place, with Tom Torgerson continuing to be TPI’s Chief Executive Officer and guiding the future development of the company. All policies, procedures and benefits will remain unchanged. The only difference is that TPI’s associates become the owners, and through the strong execution of their roles within the company, they can continue the unprecedented growth TPI has experienced over many years. It is this continued growth that will assist in funding the ESOP and in turn, provide impressive retirement assets for all TPI associates. Yes, TPI associates have always been encouraged to act like an owner, but now that has become a reality. They have an opportunity every day they come to work to make a positive impact on the company and at the same time create financial security for their futures.
Now, the too good to be true part…it doesn’t cost TPI associates anything! No payroll deductions, no writing checks, no reduction of pay or benefits. The ESOP is an additional benefit that is available to all TPI associates, with associates becoming fully vested, meaning the funds in their account are 100% theirs, after five qualifying years of being at least 21 years old and working at least 1,000 per year. That’s a little more than 19 hours per week!
How does the ESOP work? It’s really pretty simple. Tom Torgerson sells the company to the associates and personally finances the employees purchase, creating an ESOP. The ESOP then uses the profits generated by the associate’s outstanding execution on property to pay Tom back. In addition, the ESOP enjoys several tax advantages that aid in creating more favorable profitability potential. As the debt to Tom is paid back and the value of the company continues to grow, it creates equity, which assists in funding each associate’s ESOP account. In reality, the better TPI associates perform, the faster their ESOP accounts grow. Wow! Now that is a win-win situation. Tom forfeits his future financial growth of the company but gains the peace of mind knowing that TPI Hospitality will live on virtually forever. TPI associates get what they want: a rewarding company to work for and the comfort of knowing they are securing their financial retirement.
So, when you go to work, don’t underestimate what a profound impact you can have on your ESOP. With almost 2,000 associates aligned with the STAY SHARP core values, an empowering vision statement and the motivation of knowing they are the owners of the company, the TPI team can’t be stopped. Whatever it takes for outrageous guest service, you have the power!