Yankee Publishing Inc. in Dublin has been family-owned since its founding in 1935, but as of July 31, the employees are now part of that ownership group.
For 84 years, ownership of the company, which was started by Robb and Beatrix Sagendorph, has been passed down from generation to generation. But now in its third and fourth generation of owners, the goal of the family in recent years was to create a plan that would provide the opportunity for shareholders to sell their shares while preserving the independence of the company.
So as of the end of July, 30 percent of the company’s ownership was shifted to its employees through an Employee Stock Ownership Plan. President and CEO Jamie Trowbridge said that an ESOP is a company-sponsored retirement plan governed by the same IRS regulations that pertain to 401(k) or 403(b) retirement plans. Employees earn shares in the ESOP over time and are paid for them after they retire or leave the company. But unlike a 401(k), employees do not pay for the shares, as the company pays for the shares out of its profits. Trowbridge estimated it would take about four years for the company to pay off the 30 percent stake in the company.
“At that time we will decide what the next step will be,” Trowbridge said, while adding the plan for the family plan is to sell all of the company’s stock to the ESOP over time.
Currently, the Yankee ownership is made up of 11 people in the third generation of the family, including Trowbridge, and six in the fourth generation, Trowbridge said. But there are a total of 22 potential owners in the fourth generation and with many of them not knowing each other well, dispersed around the country and no one showing real interest in taking over, Trowbridge said it was the right time to plan for the future of the company.
Trowbridge said there is excitement about the company now being employee-owned and pointed to their dedication that has led to years of success.
“We felt we were well suited for employee ownership,” Trowbridge said.
Trowbridge said he started paying attention to the ESOP model about 15 years ago and really began researching it two years ago. He met with other companies that have instituted the ESOP program and came to the realization with Yankee’s employee loyalty and longevity it was the best option.
“If we had sold the assets of the company to different buyers, it would have been very disruptive,” Trowbridge said. “The family members would not accept a solution that resulted in the business being broken up and our employees losing their jobs.”
Other companies that have created an Employee Stock Ownership Plan are King Arthur Flour in Norwich, Vermont, Hypertherm in Lebanon and Gardener’s Supply in Vermont.
“We did it now because it’s a time when our finances would support it,” Trowbridge said. “Because we need to be able to pay the existing shareholders for their 30 percent.”
While the family decided to start with 30 percent now, there is an expectation for the future.
“We’ll gradually transfer the ownership from the family to the employees,” Trowbridge said.
What was most important to Trowbridge and the rest of the family ownership group was maintaining the brands that have been established over the years and seeing that things remain unaffected moving forward.
“So that the business and the brands will go on,” Trowbridge said. “We’ve been very fortunate for as long as I’ve been CEO that the family has been united in the goals it wants for the company.”
Unlike a sale to another company or family, the July 31 switchover saw no change in the daily operations.
“And that’s the whole point. That the day after, everything looked the same,” Trowbridge said.
It allows for the company to move forward in its mission and retain the same values.
“We really need to remain focused on success in the short term to be successful in the long term,” Trowbridge said.
The company, with 85 employees based in offices in Dublin and Manchester, publishes Yankee, The Old Farmer’s Almanac, New Hampshire Magazine, Family Tree Magazine, and other publications and websites.