At a Glance:
How Do ESOPs Differ from ESPPs?
Why Does Shopping an ESOP Matter?
How Does an ESOP Business Benefit the Community?
Does ESOP Affect the Shopping Experience?
As of July 2023, East Coast Appliance officially offers an employee stock ownership plan (ESOP) to its employees. This is a significant benefit of working for this organization and empowers employees to make themselves heard while potentially earning more by staying with the company. Our team at East Coast Appliance is committed to protecting our company culture while supporting our local communities. Forming an ESOP was just one step to protect these values.
What is ESOP? How does it benefit employees? What does it mean for the community? These are a few of the questions that our team has heard in recent weeks, and we are happy to clarify what they means. Learn more about employee owned businesses and how patronizing ESOP companies such as East Coast Appliance can make a difference in the area you live.
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Shop NowWhat is ESOP?
The first step to understanding why this is such a big deal for our team is to clarify the question: what is an ESOP? The acronym stands for “employee stock ownership plan,” and it means we give our employees shares of East Coast Appliance. Ownership is spread out between the founder of the company and all our employees. An ESOP is viewed as a benefit plan to incentivize team members to stay within a company while also paying them when they leave as a thank-you for their hard work.
What are the Advantages of Employee Stock Ownership Plans?
Here’s how an ESOP shop works: Employees are issued shares of the company at no cost to them. These shares will then be vested so their value can grow over time. Just like a public stock, when a company grows its profits, the value of the shares will increase. When the shares are fully matured or when an employee leaves the company, they will receive their portion of the profits from ownership. This is because ownership buys back the shares from the departing employee. The employee who replaces them will also receive shares, which continues this cycle of growth.
This is a popular benefit for employees because they will either receive a lump sum payment when they leave the company or receive periodic payments depending on the plan. As the company grows, so will the wealth of each of our team members.
Why is that important? It matters because, unlike big-box appliance stores, our employees are part of the company and rewarded for that. That results in better work conduct and service, which benefits you, the buyer.
How Do ESOPs Differ from ESPPs?
One of the best ways to understand what is an employee stock ownership plan is to compare an ESOP vs ESPP. An ESPP is an employee stock purchase plan, which allows employees to buy stock in the company. The stock is usually offered at a discounted rate, but employees choose whether they want to buy into the company or not. If an employee wants to buy stock shares, they will be pulled from the after-tax payroll deductions.
At East Coast Appliance, we opted to create an ESOP instead, which means the shares are given to employees for free. Our team members don’t need to choose between their take-home pay and future investments in the organization. They can receive the same paychecks while also planning for the future.
Our team understands that saving for retirement can be difficult. Not everyone has the luxury of setting aside a portion of their paychecks to prepare for their golden years. We want to make sure that our team members will have some money when they retire. An ESOP allows us to offer retirement benefits without asking our employees to contribute their own money to the program. This can give our team members and their families peace of mind while extending our core values for taking care of our communities.
Why Does Shopping an ESOP Matter?
For employees, the transition to an ESOP signals a significant change in their role within the organization. When a store is owned exclusively by management, the staff has no say in how things are run. Their goal is to work, collect their paychecks, and leave. However, with an ESOP, our employees are now part owners of the organization. They have a say in how the business is run and the culture around them.
An ESOP is so much more than a retirement plan. It is also an opportunity for the newest and lowest-level team members to have a voice in changing where they work. Because great ideas can come from anyone. If an employee has a plan to increase profits, they (and their coworkers) can directly benefit from their efforts because the revenue growth from their ideas will increase the value of employee shares as a whole.
Our goal as a company is to be more than an appliance store. We want to be an employer that people flock to and create a workplace culture that retains workers for several years—if not decades. The development of the ESOP is only one step toward living these goals. It is meant to incentivize and empower every employee to do their best so they can reap the financial benefits of their hard work.
How Does an ESOP Business Benefit the Community?
There are several benefits of employee owned companies to local communities as well. When you buy from a big box store, the profits are first sent to the company headquarters and are then distributed to public shareholders across the United States—if not the world. While local employees receive paychecks for their work, these payments don’t compete with the global profits that these businesses bring in. The community sees none of that.
With an ESOP, all of the profits stay in the where the store is located. If you visit our Fredericksburg location, for example, the employees receive their paychecks and their shares of the profits when it is time to cash them out. We love our local communities. Our kids attend nearby schools and our team members support a variety of arts non-profits, nature preserves, and recreational sporting events. The more money that we can pass on to our employees, the more they can fund their favorite community organizations and small businesses.
Does ESOP Affect the Shopping Experience?
While the transition to an employee owned business is big news for our team members, our customers might not notice the difference. Our prices, inventory, and store policies are all remaining in place. So you can still find one of the largest selections of refrigerators, dishwashers, and other hoem appliances in Virginia or find the perfect laundry set for your home. We will continue to offer seasonal sales and manufacturer promotions so you can find appliances from your favorite brands at fair prices.
Our hope is that, by creating employee owned stores in Virginia, we encourage our team members to buy into the East Coast Appliance vision and culture. We want our employees to be engaged in their work and excited about what they do. This will make them happy to help you find the perfect appliances for your kitchen. We have always wanted to be one of your favorite local appliance shops. Now we can also strive to have the best-informed employees when it comes to buying dishwashers or choosing between a cooktop or range or any other apppliance needs.
Not only are we committed to providing a positive work experience for our team members, but we also want to create a comfortable shopping experience for customers as well. Check out the appliances we currently have in stock to see if they meet your needs. You can also visit our scratch and dent section to find great deals on your favorite brands. Browse our selection online or visit one of our Virginia appliance stores today to learn more.
Why Trust East Coast Appliance
Locally owned and operated since 1988, East Coast Appliance is the largest independent appliance dealer in Virginia. We sell it ALL — from new name-brand appliances to scratch-and-dent appliances to our very own refurbished appliances. Aside from our huge selection of every major brand and everyday low prices, what sets us apart from our competitors is that we service what we sell and that we are locally owned and operated with factory-trained associates. And if you’re a local, great news: East Coast Appliance is committed to providing the absolute lowest prices on the same available brand and model — simply bring in the ad of the local retail competitor while the lower price is in effect and you'll receive your price match.
Shop Your Local ESOP at East Coast
There is a reason we are dubbed “The Discount King” — for unbeatable deals, shop appliances online at East Coast Appliance. Our friendly associates are always happy to help you learn what is an ESOP? Feel free to call us or use our online chat feature. Better yet, stop by one of our showrooms to see why we are the best appliance store in Virginia. Visit us today!
Learn More: East Coast Appliance Reviews: Virginia Appliances