Celebrating 20 Years: ESOP Anniversary
For over 55 years, Harkins has been providing exceptional preconstruction services combined with proactive on-site construction management. Our history and strong culture are rooted in our founder Thomas P. Harkins and his successor Blase Cooke. For the first 35 years, Harkins was run with sole ownership that transferred from Tom to Blase. In 2001, Blase established
the Employee Stock Ownership Plan (ESOP), a new structure that would provide Harkins employees with an opportunity for a secure retirement benefit.
This type of succession plan is one that Blase believed all employees would benefit from. One of his greatest concerns was the many people that put in ‘sweat equity’, especially field personnel, who were not financially positioned to provide for their families through retirement. Our 401K plan was not something everyone fully participated in and social security would not suffice. When he was introduced to the ESOP, Blase was confident that this type of ownership would benefit all employees, as well as the future of the company.
We embarked on a year-long process of establishing the ESOP in 2001 with numerous consultants, documentation, and meetings. Former President Dick Lombardo, President & CEO Gary Garofalo, and I were the initial trustees involved in the collaboration of our bank relationships and bonding company to make Blase’s initial dream of the ESOP a reality for Harkins.
Former Retirement Benefits Administrator Gladys Hyman was an original committee member and a huge asset to organizing and keeping all of the documentation up to date. Gladys served the ESOP until her retirement in January 2020.
Unfortunately, 2001 was not the best year to introduce a major
ownership change with events such as the September 11th attacks, the dot-com bubble, and the Enron scandal. Nevertheless, Harkins officially became an ESOP that year. Blase provided a personal loan, along with our bank (SunTrust) that enabled employees to obtain 61% ownership in the company as the loans were paid off. Later that year, Blase learned he had cancer, but the ESOP process was well underway, with loans officially paid off by April 2005. The ESOP grew into a substantial benefit for all employees thanks to Blase’s selflessness for the greater good of our company.
Blase passed in October of 2007 knowing he had provided a meaningful gift and secured retirement to his employees. After his passing, upper management secured the remaining outstanding shares from Blase’s estate with Harkins and senior management personally purchasing that stock. The remaining 39% of the stock was sold to the ESOP in 2013, which allowed Harkins to become 100% employee-owned. Harkins still benefits from tax advantages and the ESOP has become a significant morale booster that keeps employees involved in the success of the company, along with being a recruiting tool for potential candidates.
Over the last 20 years, we have grown our company, share price, and dividends. Our employee accounts have also grown in addition to being a considerable part of our employees’ retirement benefits. Today, our ESOP is still run by an internal committee that has term limits, made up of current members: HR Specialist Megha Patel, Project Executive Casey Hughes, and Project Manager Greg Ferenschak. We have outside counsel, financial advisors, valuation companies, and auditors involved as well. Current Trustees are Controller Jim Beck, Senior Vice President & General Counsel Jim Thompson, and myself.
The Harkins ESOP was initiated by a remarkable man and continues to support a continuously growing company that owes its success to its exceptional employees.