North Kansas City construction firm Mega Industries Corp. announced this month that it is now 100 percent employee-owned.
Founded in 1992, the construction company became a 56 percent Employee Stock Ownership Plan (ESOP) in 2006, beginning its approach to total employee investment. Until June, CEO Brian Gordon and COO Craig Bridgeman were majority owners.
“We wanted to send a clear signal to all of our employee-owners that Craig and I may not be around in five to 10 years, and we have their full trust in thinking and acting like owners moving forward,” Gordon said.
In June, Gordon and Bridgeman sold back their shares of the company. Today, all 60 employees are investing in the company through the acquisition of stock that will accrue into retirement assets.
Mega’s leadership saw value in an ESOP for a few reasons. It provided long-term succession planning as construction companies can be hard to sell, Gordon said. Another incentive was to provide an alternative retirement benefit to employees, in addition to traditional retirement options.
“Our ESOP plan will most likely provide much more retirement savings for our long-term employees than any other retirement savings option, and they don’t have to contribute a penny of their own money,” said Gordon. “But they do have to contribute hard work and great ideas to make our company perform at its best.”
The move to an ESOP also has helped employees to begin acting like owners, developing a stronger company culture. The leadership also saw positive tax implications by the move; S Corporation ESOPs pay no corporate income tax, creating savings that can be reinvested to grow the business, increasing share value for all employee-owners.
As part of the move, Tyler Wesselman was named as vice president.
“I’m proud to help guide this organization forward,” said Wesselman. “Our philosophy at Mega has always been that ‘together we can do it all.’ This employee-ownership model was a natural next step for us.”
Grossing an average of $25 million to $30 million in annual revenue, Mega has long served Kansas City primarily in the areas of heavy highway contracting, and parks and recreation. Clients include City of Kansas City Parks & Recreation, Children’s Mercy, Federal Reserve Bank of Kansas City, and Zona Rosa Development. Earlier this year, Mega completed work on the Kansas City Zoo’s Stingray Bay.