In a past SPARK, I’ve written about Hypertherm being an “ESOP” (Employee Stock Ownership Plan) company. That’s a mechanism by which business founders / owners can share ownership with employees (or “Associates” as we call ourselves at Hypertherm) by selling shares to an ESOP trust. In this way, the founders can take steps to ensure the continued independence and founding focus of the business beyond their direct ownership.

When I wrote that letter, and up until the end of 2013, the Hypertherm ESOP held approximately one-third of the company’s stock. In December, the Couch Family (Dick, our founder, and his wife Barbara, long-serving executive and partner in building the business) sold their remaining shares to the ESOP, making Hypertherm 100 percent Associate owned.

The Couch Family will remain active in the leadership of the company. The family certainly could have yielded substantially more for their shares by selling to an outside buyer or to the public markets through an IPO. In explaining their decision, Dick and Barbara cited their commitment to Associates and to the communities in which Hypertherm operates. But they also stated their belief that Associate ownership made Hypertherm most likely to succeed into the future.

Dick Couch further elaborated that companies typically struggle to balance three stakeholders—the  customer, the shareholder and the employee. Most companies put the shareholder at the top, the employee at the bottom, and the customer somewhere in the middle. This fosters a paycheck mentality in employees, and mediocre service for customers. With 100 percent Associate ownership, the owner / shareholder is the employee, reducing the number of stakeholders to two—the owner and the customer. And we all know how much more committed to the customer a business owner is than either a paycheck collector or a remote shareholder.

We’ve witnessed many peer companies in our industry and others go through a succession of financial owners over the years. We at Hypertherm are grateful for the constancy of ownership, vision and direction that we’ve enjoyed during that same time. Now, we can see that continuing for as far as we can see, making us free to focus on the technology opportunities that excite us and the customer challenges that keep us constantly challenged and motivated.

Sincerely,