Ruekert & Mielke Inc. owner Bill Mielke started thinking about his eventual exit from the Waukesha-based civil and municipal engineering firm about 20 years ago. He wanted to see the firm his father co-founded in 1946 continue in his absence and remain successful for years to come, but an outright sale wasn't an option.
“A lot of people will sell their firm to the next generation management or another firm. Well, there was no way we could sell this firm to the people inside this firm because there just wasn't enough funding available for them,” Mielke said. “I wanted the firm to continue and I wanted to reward the people that had helped to make the firm successful.”
Mielke, the firm's majority shareholder, decided to form an Employee Stock Ownership Plan and transferred 40 percent of the company's stock to employees in 1995. As of March 1, the firm has transitioned to a 100-percent ESOP.
ESOPs are a non-traditional setup. They involve extensive annual valuations, in-depth employee education and thoughtful management succession planning.
However, their benefits can be immense – including affording the company lower or zero taxes, generating economic growth, engaging employees in the big picture performance of the firm and setting them up for retirement.