After more than 50 years in business, The Graham Company, a Philadelphia, Penn.-based insurance and employee benefits broker, has become 100% employee owned through an employee stock ownership plan (ESOP).
This move serves to further the firm’s strategy of remaining committed to what it sees as its primary differentiating asset – it’s people, Ken Ewell, President, COO and Principal, told Insurance Journal.
“Bill Graham bought The Graham Company from his father in 1968,” he said. “Over the decades, despite our rapid business growth, that familial atmosphere has not dwindled – it has strengthened. The Graham Company is very much like a family – a high performance family. Our culture isn’t a slogan or catchy phrase written on a wall, it’s the core of everything we do and instilled in every person carrying a Graham business card.”
Chairman of the Board and CEO Bill Graham, as well as Vice Chairman and Principal Mike Mitchell and Ewell, recently announced that existing shareholders sold their shares to the plan and now every employee is able to own a piece of the company.
Ewell explained it was important to the firm to remain privately held and keep ownership internal as part of a people-focused business strategy established by Graham at the firm’s start – something employees call The Graham Way.
This is an increasingly rare move at a time when the insurance industry is continuing to consolidate. However, Graham turned down many offers from potential buyers knowing that if the firm was sold, a buyer would likely cut staff for a short-term profit increase, Ewell explained.
“We invest heavily in our employees,” he stated. “Cutting talented employees goes directly against our business philosophy. Regardless of the offers, it was more important that we ensured our firm’s culture and legacy remained intact. Doing things The Graham Way has served us well for more than 60 years. This ESOP is an investment in the next 60 years.”
An ESOP is an employee benefit plan, which provides company stock to employees as part of their retirement benefit plan. By becoming 100% ESOP-owned, all company stock is now held in trust by the ESOP, according to a company press release. The Graham Company worked with consulting and investment banking firm MarshBerry & Company Inc. (MarshBerry) to implement an iCAP solution. The iCAP solution combines an ESOP with other unique structural features to offer a customized solution to allow insurance brokers like The Graham Company to perpetuate and remain independent, the release stated.
“ESOPs are a proven way to guarantee that companies remain privately held and maintain a high caliber of client service, and they can also help retain and attract talent,” Ewell said. “In our case, a merit-based ESOP was the right choice for The Graham Company.”
Going forward, the firm plans to remain committed to its employees, offering health benefits, a 401(k) plan and now the ESOP – a qualified retirement plan that further strengthens financial security.
“We celebrate employee anniversaries and birthdays, volunteer together and have a championship softball team that competes in an insurance league each spring,” Ewell said. “This commitment to our employees has resulted in loyalty that is essential to our growth. We are extremely proud of the fact that even with a strong millennial presence, Graham has more than 30 employees who have been with our agency for more than 20 years.”
It’s not just the employees that are considered an essential part of The Graham Company’s recipe for success, however, but the clients as well, Ewell said.
As the firm has grown to 180 employees and revenues of $54 million, the foundation of its strategy is rooted in innovative risk management, claims and safety training programs, which have been constantly refined over the last six decades, Ewell said. The firm has a six-month training program that teaches employees how to deliver the most comprehensive insurance policies for every client. When training is complete, employees are positioned to understand the intricacies of clients’ industries and provide continuous strategic guidance on complex risk issues.
“Equally important, as a privately held company, our employees understand that for our clients, it’s not just about protecting their livelihood, it’s about protecting their legacy,” Ewell said. “We have a strong sense of purpose: to be our client’s relentless advocate protecting their employees and balance sheet. With business and technology rapidly evolving, our goal is to continue growing our company by constantly looking for ways to improve our approach to risk management.”
In October 2016, the firm opened an office in Washington, D.C. to allow it to further expand into the D.C., Maryland and Virginia area.
“Our strategic thinking and 24/7 approach resonates with [our clients], as they bring these same types of qualities to their own work,” Ewell said. “While our clients are certainly focused on profitability and running a strong business, they also share our sense of purpose and understand empowered employees are key to success.”
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