By Andy Manchir, partner, Katz Sapper & Miller
Jan. 1, 2001, marks a celebrated milestone for KSM (Katz Sapper & Miller) – our transition to an employee stock ownership plan (ESOP). This bold move transformed KSM, giving employees ownership in the firm and preserving the entrepreneurial spirit, culture and independence that has been part of our identity since our founding in 1942.
This shift was not just structural but inspirational, encouraging greater commitment, responsibility and motivation to drive KSM’s long-term success. More than 20 years later, the formation of our ESOP stands out as one of KSM’s most impactful decisions, offering insights that continue to shape our culture, client dedication and community engagement.
Here are five key takeaways from our ESOP journey.
- A Unified Culture Builds a More Connected Team
One of the most significant impacts of becoming an ESOP is the stronger connections among team members. While KSM has always valued collaboration and support, becoming an employee-owned firm has fostered shared accountability and purpose, therefore strengthening our culture. To support our collaborative environment, we established the role of director of workplace culture and experience. By continually investing in our people, we’re investing in the future of our firm and creating a loyal, engaged and productive team dedicated to maintaining the high level of client service that KSM is known for. The commitment to our people has earned KSM recognition as one of Indiana’s Best Places to Work for 19 consecutive years.
- Employee Ownership s a Powerful Differentiator for Talent Attraction and Retention
The ESOP model provides a significant advantage in attracting and retaining top talent, especially in a highly competitive job market where candidates seek meaningful experiences and growth opportunities. The chance to own part of the business and have a direct stake in its success appeals to many prospective employees.
Retention is equally critical, and the benefits found in KSM’s ESOP have helped keep our turnover below the industry norm. Over the past five years, our turnover rate has averaged 11%, compared to the 15% industry average noted in an INSIDE Public Accounting 2023 report. The long-term wealth-building potential of our ESOP incentivizes employees to stay, and in an industry where client continuity and institutional knowledge are vital, this stability benefits both our employees and clients.
- An Ownership Mindset Drives Innovation and Entrepreneurial Spirit
Our ESOP model has been central to fostering a leadership mentality at every level, encouraging proactive problem-solving and innovative solutions across the firm. The spirit of ownership empowers our people to drive growth initiatives and continuously enhance client service and internal processes.
Significant investments in technology have allowed us to expand our service offerings and adopt state-of-the-art tools and platforms that improve operational efficiency and deliver greater value. Our entrepreneurial mindset, paired with ongoing investments, ensures KSM remains adaptable and competitive in the evolving accounting industry.
- The ESOP Model Builds Long-Term Wealth and Security
One of the clearest successes of our ESOP is its capacity to deliver robust returns. Since its inception in 2001, KSM’s stock has achieved double-digit returns in 21 out of 23 years, surpassing broader market trends and demonstrating stability even during economic downturns, such as the Great Recession and COVID-19. This steady growth has enabled employees to build significant wealth in their ESOP accounts, providing a level of financial security that goes beyond many traditional retirement plans.
By reinvesting profits into our workforce, we create a direct connection between KSM’s growth and the financial well-being of our employees, regardless of position or tenure. This structure rewards employee engagement and promotes long-term commitment, professional development and personal growth for all employee-owners.
- Employee Ownership Positively Impacts Communities
At KSM, we believe employee ownership extends beyond our firm, positively impacting the communities in which we live and work. By keeping jobs local and supporting economic stability, our ESOP creates a ripple effect that benefits surrounding communities. Guided by our community engagement manager, KSM employees actively give back through volunteering, financial support and community leadership. This mission-driven approach connects employees with causes they’re passionate about, embedding community impact within our culture and reflecting our commitment to social responsibility.
The Lasting Impact of Employee Ownership
KSM’s journey as an ESOP demonstrates the power of employee ownership – from strengthening our culture to driving business growth and fostering meaningful community relationships. By placing ownership in the hands of our people, we’ve empowered them to shape their financial futures and instilled a sense of purpose across the firm. As we continue to evolve, these core values remain at the heart of KSM, ensuring that we continue to be a resilient, innovative and community-centered firm for years to come.
Andy Manchir is a partner in KSM’s valuation and ESOP services groups. He helps clients understand the value of their business and advises them on succession planning options, including ESOP, third-party sales or family transitions.
