About
SkyBlue Builders (SkyBlue) is a Denver-based general contracting construction firm, that transitioned to an Employee Stock Ownership Plan (ESOP) in March of 2024. The company employs about 50 to 60 people and primarily focuses on public sector projects.
1. Organization of the Sky Blue ESOP
SkyBlue's ESOP was established following the decision by the previous owners to sell the company back to the employees rather than to an external entity, ensuring SkyBlue would remain in existence.
A. Ownership Acquisition and Vesting
The ESOP is structured as a long-term retirement plan that provides equity to employees at no cost to them.
- Eligibility: Employees must be 18 years old, have 12 months of service, and complete 1,000 hours of work to be eligible for enrollment. This inclusion of high school apprentices by setting the age requirement at 18 aims for inclusivity.
- Vesting Schedule: There is a five-year vesting schedule. For instance, one employee started in October and their benefits would begin on January 1st of the year they become eligible, followed by 20% vesting year-by-year.
- Share Distribution: Shares are distributed annually based on an employee's salary or income ratio, capped at a certain amount, meaning employees who make more receive more shares. The company plans to disperse 1 million shares over 25 years, allocating about 40,000 shares per year.
- Valuation: The ESOP's value is theoretical until "statement day". SkyBlue was anticipating its first official valuation (statement day) in August 2025, after having delayed the initial target date.
B. Governance and Education
The ESOP has necessitated structural changes in governance and communication to foster an ownership culture.
- Board Structure: SkyBlue’s board is composed of five members: the CEO, two representatives from Apis & Heritage (the entity that acquired the company and serves as its trustee), two independent directors from the construction industry approved by the trustee, and one designated seat for an employee representative.
- Employee Board Representation: SkyBlue holds elections for its first employee-appointed board member, who must not be on the executive team. Active employees, regardless of their role or status as apprentices, are allowed to vote.
- Education and Committee: An ESOP committee of about six people was established to drive education and understanding of the program. The company relies heavily on Apis & Heritage (A&H) for customizable resources and educational materials, as well as the National Center for Employee Ownership (NCEO). Information is also shared through quarterly financial meetings.
- Decision-making: SkyBlue follows a three-tier hierarchy of leadership and managers, with information shared through an Open Book approach. The company holds quarterly rather than monthly meetings, like the other ESOPs in the study, which might limit employees’ understanding of the ESOP and its operations.
2. Financial Benefits and Long-Term Security
The ESOP is primarily viewed as a vehicle for retirement wealth and financial security, supplemented by other benefits and competitive pay.
- Retirement Cushion: The ESOP is seen as a long-term retirement plan, functioning as "another 401k". Employees appreciate that the company is investing in them for the long term, which provides security against the uncertainty of public markets.