Dorian Drake’s Owners Transfer Company Ownership to Employees
WHITE PLAINS, NY–Dorian Drake International’s owners have completed a transaction transferring 100% of company ownership to its employee stock ownership plan, or ESOP. The transaction closed on December 31 and was announced to company employees on January 4.
Company CEO and principal owner Ed Dorian Jr. established the firm’s ESOP in 2012 and had previously granted 7% of the company’s stock to the ESOP. In the recent transaction, the owners sold the balance of company stock to the employee stock ownership plan. The ESOP was represented in the transaction by Miguel Paredes, CEO of Prudent Fiduciary Services, a West Covina, CA-based firm that provides independent ESOP trustee services. Paredes will remain the trustee for the ESOP and the firm’s approximately 40 participating U.S.-based employees.
In conjunction with the transaction, the company made a parallel, long-term commitment to a phantom stock plan, a deferred compensation plan, established in 2012 for the sales professionals whose services the firm retains outside the U.S. but who are not eligible for ESOP participation. Dorian Drake currently retains the services of 15 sales professionals in Latin America, Europe, the Middle East, and Asia Pacific.
Dorian Jr., who will continue as president and CEO, said the ownership transition makes sense for several reasons. “We have a core group of people who have been with us for 10, 20, 30 years or more who have helped build the business we have today. Sharing equity is an appropriate reward for their hard work and dedication and a great way to incentivize them and others to stay and grow the business. We believe it will also help us attract the next generation of talent to Dorian Drake.”
He added that Dorian Drake has shared its financials and bonused its staff based on net profitability for more than 20 years, key parts of a practice known as open-book management. “Our open-book methodology has enabled us to build an ownership culture over time that makes this a relatively small leap and, I believe, ensures our success as a 100% employee-owned company.”
Robinanne Wallace, Dorian Drake’s corporate controller and 23-year veteran of the firm, commented, “Now that we are a 100% ESOP, we will be able to build value in the company and reap the benefits when we retire. We want to prove to Ed that he made a good decision in selling his family business to the employees.”
An ESOP is a retirement plan that was made possible by Congress in 1974 under the Employee Retirement Income Security Act (ERISA), the same act that governs 401(k) plans. The plan establishes a trust to hold company stock for employees. It is not to be confused with either a stock option plan or a stock purchase plan. ESOPs are almost always funded by the company, not by employee contributions, which is the case with Dorian Drake.
About Dorian Drake International, an Export Management Company (EMC)
Based in White Plains, N.Y., Dorian Drake International is an export management company that manages international sales and marketing, customer service, credit and collections, and traffic and logistics for manufacturers selling in markets outside the United States. The firm staffs stand-alone sales teams in five distinct industries: automotive products, foodservice equipment and supplies, hardware and lawn & garden products, industrial and environmental, and medical products. To learn more, go to www.DorianDrake.com.
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