Atomic employees at a quarterly meeting.
During the last two quarters, Atomic Object added 10 more employee owners, thanks to a new Employee Share Purchase Program (ESPP).
“We’ve always had a culture of ownership — that’s why we have open books and open board meetings,” said Carl Erickson, Atomic’s President. “We’re not changing the culture or expecting to change it. We’re acknowledging the culture that’s already there.”
How the ESPP Works
Previous to the ESPP, 13 non-founder employees each owned between 1% and 7% of the company. This system makes it hard to expand ownership because someone has to sell shares before another person can buy them.
Under the ESPP, there’s a pool of inactive shares (up to 10% of the total) that employees can purchase. Atomic has set a cap on the amount that employees can invest per quarter, and any employees who leave the company must sell their shares back, adding them to the inactive pool.
“We could have sold all the shares up front and made future employees wait until someone else was willing to share, but we didn’t want ownership to be an exclusive club,” said Vice President Mike Marsiglia. “Our plan doesn’t discriminate against people who want to buy shares in the future, yet it rewards people who participate earlier.”
The program is open to all employees who have been with the firm at least a year. To invest, employees elect to have money taken from their pay checks and put into an account. Once a quarter, that money is used to buy shares. Employees can invest up to $500 each quarter.
Turning Atomic Object into a broadly-held company has been Erickson’s vision for many years, but it took some work to find the solution. The current plan was developed with help from attorneys at Warner Norcross & Judd.
“They did a great job creating a program that works for a small company,” said Erickson.
You can read more about our Adventures in Ownership on Carl’s blog, Great Not Big.
The program has been a success, with 10 employees entering the program during its first two quarters and several more planning to do so later this year.
“Over half of our employees now own part of the company,” said Marsiglia. “And it’s not just ‘phantom stock’. Our employees actually own a piece of the LLC, receive dividends, and have an opportunity for capital appreciation.”
Employees appreciate the ability to become owners gradually through a series of small investments.
“It’s a nice way to spread ownership to everyone in small chunks,” said new owner Shawn Anderson. “It’s a smaller investment, but it grows over time, and you can continue to contribute to it. It’s pretty awesome.”
“I really like that I can start to get ownership without having to take on any debt,” said new owner Mike English. “It seems like a good investment.”
It’s also a reflection of Atomic’s commitment to transparency and trust, said Marsiglia. “We had eight people sign up and put money up before we’d even formalized the plan. That shows how much trust we have inside the company.”