There was a big gift awaiting the 1,200 employees of Norco Inc. this holiday season. They became part-owners of their company, under an employee stock ownership plan, or ESOP.
Norco is a Boise-based company that sells medical supplies and welding, safety and industrial equipment and gases around the Northwest region. It currently has 75 store locations and about $300 million in annual revenues.
“It’s probably the biggest single thing for the employees at Norco that we’ve ever done,” said Norco President Ned Pontious. “I call it a gift from our owner.”
Until the ESOP deal went through on Dec. 23, Norco CEO Jim Kissler owned 40 percent of the company. He sold most of those shares.
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The company’s employees now own 35 percent of the company under an ESOP.
One goal of doing an ESOP was “to perpetuate the company for the next 50 years and kind of continue my father’s legacy,” said Kissler, longtime CEO of the company his father bought in the 1960s.
Kissler has watched employees retire in their 60s, having spent decades at Norco. Kissler hopes to reward longtime employees for hard work by giving them a financial stake in day-to-day operations and allowing them to benefit financially from the company’s growth.
Kissler also had his eyes on the future when he signed off on the ESOP sale. The 61-year-old wants to diversify his own investments as he plans for retirement in five years or so.
And now that his daughter Nicole Kissler has joined the company — she is currently a manager on the medical billing side of the business — he wanted her to have a team.
The ESOP “also gets Nicole some help going forward, with 1,200 employee owners who are motivated ... to think and perform like owners,” he said.
The younger Kissler is excluded from the ESOP because of her family relationship, “but I’m still 110 percent supportive,” she said. “There’s this dull roar. Everybody is excited about it. They just want more information about it. ... That’s what we’ll do for the next few months.”
Kissler said the ESOP is the most complicated transaction he has worked on — more complex even than Norco’s acquisitions of other companies. It cost about $500,000 to put together, he said. Nicole Kissler joked that whenever her father didn’t have time to chat this year, she knew he was “ESOPing.”
There are very few ESOP companies in Idaho. One of the largest and the most well-known is WinCo Foods, which has thousands of employee-owners.
Another local company, Nampa manufacturer KNG, recently joined the club with a complete sale to employees. The KNG factory makes menu covers, aprons and other supplies for the restaurant industry. With $12 million in annual sales and 60 employees, KNG had been partly owned by the ESOP but mostly owned by a family, whose members gathered at a company party to tell employees about the ESOP sale in June.