Syracuse, N.Y. — Eric Mower, who turned his Syracuse-based ad agency into one of the largest independent marketing communications firms in the country, has sold ownership of the company to his employees.
The agency said Wednesday that Mower transferred 100% ownership of the company to a newly formed employee stock ownership plan. The agency’s executive leadership team, including Mower, will remain in place.
The move means that current and future employees of the agency will receive ownership shares in the agency, providing them with an added retirement benefit when they leave the company.
They also receive the benefit of additional job security, since the agency cannot be sold to a third party without the approval of the ownership plan, which is held by a trust that must act in the interests of the employees.
Mower shared the news of the ownership transfer with employees at special gatherings Wednesday in Syracuse, where the agency began and is still headquartered, and Greenville, South Carolina, a central location for employees from the agency’s Charlotte and Atlanta hubs.
Mower, 77, said he considered other options, including selling the agency to a third party, but decided an employee ownership plan would be best for the company and its employees.
“I went from being sole owner to now being a colleague of 150 employee owners,” he said.
Employee stock ownership plans are an increasingly popular way to provide a market for the shares of departing owners of successful, closely held companies, and to motivate and reward employees, according to the National Center for Employee Ownership.
Almost unknown until 1974, there are now 6,460 such plans covering 14.2 million people in the U.S., according to the center. In 2019, the last year for which data is available, 239 new employee stock ownership plans were created, covering 46,537 participants. In New York, there are 257 such plans covering 92,169 participants.
A plurality of the plans are in services or manufacturing companies. Syracuse Label in Cicero adopted an employee stock ownership plan in 2007.
Mower joined the Silverman Advertising agency in 1968 and later bought out its owner, Art Silverman, and renamed the agency Mower & Associates. In 2018, he shortened its name to Mower.
Over the decades, Mower has grown the firm into one of the largest independent marketing, advertising and public relations agencies in the U.S.
Mower said he expects to retire someday but will continue as the agency’s chairman and CEO for now.
“I love every day of it,” he said. “I love the work.”
Under this kind corporate structure, ownership of a company is sold to the employee stock ownership plan at no cost to the employees. The plan repays the owner — in this case Mower — over time from the company’s profits, much like a mortgage is paid down.
As the plan pays back Mower, current and future employees will receive shares in the company based on their salary relative to the company’s overall payroll.
When an employee leaves the agency after a five-year vesting period, the cash value of those shares are paid to the employee, much like a profit-sharing plan does.
Mower said the plan will help the agency recruit and retain employees because of the added financial benefit and job security it provides.
The agency employs 150 people in offices in New York City, Buffalo, Albany, Rochester, Syracuse, Chicago, Atlanta, Boston, Denver, Miami, Charlotte and Cincinnati.
The agency said its leadership team will remain in place. In addition to Mower, the team includes President and Chief Operating Officer Stephanie Crockett; Vice Chairman – Chief Brand Officer Doug Bean; Chief Administrative Officer Chris Steenstra; Chief Financial Officer Cheryl Duggan; Chief Creative Officer Doug Kamp; and Executive Vice President – Managing Director, Public Relations and Public Affairs Rick Lyke.
Read More: Who’s the boss now? Ownership of long-time Syracuse ad agency is going to employees