In 1910, William Urschel invented the Gooseberry Snipper, a piece of machinery that snipped off the stems and blossoms from the popular fruit that was then sold to Michigan canneries. The Snipper could do the work of 100 men in one day and
revolutionized the food processing industry. Gooseberry pie is no longer a staple at
the dinner table, but chances are the frozen French fries, green beans or carrots sitting
in your freezer have been sliced and diced by one of Urschel Laboratory’s machines.
For 106 years, Urschel family members ran the Indiana-based company, which
employs more than 400 and prides itself on having never laid off an employee. Today,
the founder’s grandsons, Bob Urschel and Rick Urschel, lead the company as chair of
the board and CEO, respectively. But, according to Urschel CFO Don Marchetti, Rick
Urschel was concerned with the company succession and future leadership, even
though he still sees himself and his family in the business for the long run.
“I’m not sure how many years my dad has left to work, but everyone appreci-
ates having him around,” Rick Urschel says. “He’s a great source for institutional
knowledge, and I rely on his council. As for me, I love living here and couldn’t think
of anywhere else I’d rather work. I’ve grown up with a lot of these guys, and the
friendships I’ve had over the years make coming to work and doing the best job I can
an easy task.”
Still, they had to consider the possibility that the fifth generation might not be
interested in running Urschel. How could they protect the company the family had
built? How could it protect its employees?
“Over the 100 year history, it’s always been about the employees. The family feels
that they are successful due to the people who work for them,” Marchetti says. The
question for the family, he says, was “how do we give the business to the employees,
who are really the ones who made it what it was?”
Creating an ESOP
In the end, the solution for the Urschels was one that is gaining popularity throughout
the country as baby boomers approach retirement – the family created an Employee
Stock Ownership Plan and sold the company to its employees. On February 29, 2016,
Marchetti and his co-workers became owners of Urschel through a plan created with
the assistance of Wells Fargo’s ESOP division.
Kim Abello, national ESOP director at Wells, has been helping companies create
ESOPs for 25 years, and she moved to Wells in 2014 to spearhead the division. While
creating an ESOP has many benefits for a privately held company like Urschel, she
notes that public companies are also transitioning to ESOP, although in smaller
numbers, and handing over a smaller percentage of the stock.
As Baby Boomers Retire, ESOPs Help
Employees Take Over the Businesses
BY NADINE BONNER
Building a successful business, whether it’s a factory, a service company or a retail outlet, is a lifetime
accomplishment. But there comes a time when even a successful business owner wants to step down
and retire. Creating an Employee Stock Ownership Plan (ESOP) can protect a business’s legacy and its
longtime employees. This is how it’s done.
DAN MACHE T TI
National ESOP Director,
Wells Fargo ESOP