3
OPINION
ESOP essentials for AEC leaders
I recently had the opportunity to spend three insightful days at the Employee Owned 2025 conference, hosted by The ESOP Association. The event brought together hundreds of professionals passionate about employee ownership, including many from the architecture, engineering, and construction industries. ESOP success in AEC firms depends on financial discipline, clear governance, and treating employee ownership as a lasting cultural investment.
Brad Wilson, CMA, MBA
It was encouraging to see interest in ESOPs continue to grow as firms explore options for ownership transitions and long-term employee engagement. At the same time, I noticed that some of the same questions, challenges, and misconceptions continue to surface, often from firms at very different stages in their ESOP journey. While each firm’s experience is unique, three themes consistently emerged in my conversations regarding implementing and operating an ESOP. I’m sharing them here because they are universally applicable to both firms that are thinking about becoming an ESOP and firms that have had an ESOP for years. 1. Financial discipline is non-negotiable. The initial and annual valuations of the ESOP firm depend heavily on consistent, professional practices that produce timely and accurate financial reports. Firms that lack standardized financial processes
or rely on inconsistent reporting introduce risk into the valuation process, and greater risk leads to lower valuations. All ESOP participants want higher valuations; the culture depends on it. And if the firm is successful and grows, the challenge of evolving financial management practices to match the complexity of a larger firm continues to grow. Whether you are a firm of 50 people or 1,500, this is a common struggle associated with becoming an ESOP and/or thriving as one. 2. Clarifying ESOP governance and roles. Most ESOPs in the AEC industry started as closely held firms with blurred lines among shareholders, the board of directors, and the C-suite. While old habits are hard to break, in an ESOP, it’s critical
See BRAD WILSON , page 4
THE ZWEIG LETTER NOVEMBER 17, 2025, ISSUE 1610
ELEVATE THE INDUSTRY®
Made with FlippingBook flipbook maker