EP5 - Mutiny on the Bounty - Communicating Positively With Key Employees Along Your Journey to An ESOP.

This episode is focused on addressing a super common question with companies going through the ESOP process with their key people.  Proactive communication is really the best way to approach your key people - however the question is when should you talk with them and how much can you tell them.  This is really difficult to answer as it deeply depends on your company culture.  But there is some guidance here based on experience with different clients!

Transcript

[0:09] Hey everyone thank you for joining today this is the ESOP guy we are in the journey to an ESOP and Beyond welcome to season 5. 
 And we're going to keep going with topics that kind of overlap between pre ESOP and post ESOP let's go ahead and kick off with this. 
 
 [0:27] Sometimes generous neighbors of these islands you comprehend my meaning sir. 
 The men might be in charge but he threatened me with. 
 Not a threat to the war. 
 There you go the men might be in charge first off the first like. 
 Guess who that actor is right the men might be in charge it's Anthony Hopkins like 1 of the greatest actors um. 
 Maybe of all time but you know at least somebody that I like a lot. 
 
 [1:00] Uh so this movie comes right from the historical account of the. 
 The story of the Mutiny of the bounty and yes. 
 I got here it's it's a 1984 remake of an old movie in the 60s and an old movie for that but really all based on a, historical uh account of of Royal Navy ship that moves into the South Pacific Ocean. 
 Around April 28th 1789 so we're we're kind of filtering in uh merging in a little history and uh, into the into the podcast as well as the movie as well but what what's the main thrust here it's the Mutiny right the concept behind Mutiny itself and we want to connect this to today and the topic, of talking about. 
 
 [1:54] Your communication of your ESOP to your your key people and this is 1 of those this is 1 of those very very. 
 Common common questions that we get as we go through the process the journey to an ESOP with with clients that start asking the question like when should I tell my people. 
 
 [2:14] Um and when that means is like it could be my key people could be my entire employee base but when should we tell them like when should we invite them into this process of understanding what we're trying to do with the ESOP. 
 
 [2:25] Now the reason I want to do the topic today is because I do think. 
 That this is something and I've seen this collectively like I won't point out to any 1 or 2 clients but I see collectively across the board over the last several years that this is a this is an ongoing question. 
 Many many companies have that are thinking about going through the ESOP process or are in the midst of an ESOP process or even I think this also applies. 
 To companies that are already esops and as they start to kind of um communicate other things to their to their key people. 
 Um the main thrust here is how do you really avoid. 
 
 [3:05] You know when we talk about a mutiny I'm being dramatic of course but when we're talking about avoiding. 
 Negativity when you're actually trying to do something so positive so let me give you a quick hypothetical example of what I what I mean by that. 
 
 [3:21] And you know avoiding this idea that you know what what I think is human nature is that what employees do not know, like if there's no information at all and they know something's up right so hypothetically they see the you know meeting special meetings happening in the company people are going you know behind closed doors there's weird people that you haven't seen before that you might think you know who are they really as an employee you're thinking who are they they're showing up to our company. 
 
 [3:49] And so people start to rumor and stuff starts to slip out in different ways but nobody has really the information so the the main thing is is that what happens typically is the human nature is that that without information. 
 
 [4:05] People become negative and there's a negativity of like hey this is this is going down right um something's going down and we better get ready for it right and 1 of the 1 of the things that can happen is almost the opposite, like this is where it's such a travesty it could be the opposite of of. 
 What we want to happen like what we want to happen is is the employees are super excited like we get to be part of this company as as beneficial owners for this long period of time I mean wow. 
 
 [4:36] So when we're contemplating that we want that experience in because there's not a lot of information being given or whatever the the circumstances um what we want to do is avoid the the potential problem of and we're going to call the mutiny. 
 And so in that what we're going to do today is really get into that idea of of how to go about this and answer the question of you know when should I tell my people about the ESOP. 
 
 [5:03] So as we think about that and get ready for the topic what I wanted to kind of do is just draw us to like the the podcast and if you guys have questions about you know, what the podcast is please go to our website at journey to an ESOP calm I think there's a lot of information if you are new to this podcast and you're following brand new please go to our website, and you'll find more episodes and there's really helpful information in there there's also places for you to you know ask questions you know because we like to take some of those questions into. 
 Actual topics and go through those as well. 
 
 [5:39] Music. 
 
 [5:58] This scene is all about like um the Mutiny is taking place right and there's this chaos and there's this negativity right that we're that we're going back and talking about and you know the idea is. 
 You know how do you how do you avoid that you know in the process I mean we want it to be the opposite so the classic question here is like when when should I talk to my people what should I say how should I go about that so 1 of the things I want to start with was this idea of. 
 The difference between, ownership transition in management transition and I think it's important to be having ongoing conversations now we're going to kind of circle like the population of people into your key employee bubble first I mean let's just talk talk about that first because um a muting itself if you think about it it has to be led by people. 
 And the key leaders that you guys have groomed you know say for instance to take over in a management succession process the key people that you're grooming they are um the ones that are going to lead potentially the Mutiny or any negativity right um not to not to again make it too too much like the. 
 
 [7:13] The Mutiny and the Bounty example but the point is is that they need to be brought in to this conversation and I think that to lead into that and there are um. 
 Companies in my experience that have done a phenomenal job of doing a success succession planning itself or management succession planning. 
 And keep in mind that has nothing to do with transitioning the ownership and it may have elements of ownership transition. 
 You know and say a classic management buyout scenario where you know you're going to wrap up a succession planning with a stake of ownership or you're going to in some cases they wrap up some succession planning or they. 
 Connect it to some type of synthetic Equity program like a phantom program and and really try to tie people in. 
 To the rewards of of ownership, um but but keep in mind a lot of companies don't do any of that type of thing they just they're grooming people and management succession planning. 
 
 [8:13] Their grooming people sorry for this idea of like taking over respective. 
 Functional roles in the company that are going to be in important and key and ownership or management transition can take a very very long time. 
 Um especially if. 
 
 [8:37] You're going through this this kind of roller coaster this up and down back and forth of not having enough people to um. 
 To to have the depth of talent that you need and in some cases the the per the principal person can't find somebody that can actually do the thing that they're doing you know maybe the way they're doing it and I would say. 
 Keep you know that conversation as we talk about this what we're what we're trying to do. 
 Is shift from the shareholder perspective. 
 
 [9:09] In this is where it's really important you know from an advisory standpoint if you are using consultants and advisors but I would I would recommend try to get out of. 
 The mindset of being the shareholder and what's in it for you from an ESOP perspective and shift over to what's in it for, the existing key managers and how that's going to be maybe short-term. 
 And also long term and we'll talk about that but the succession planning part needs to be uh you know delineated between management now ownership transition. 
 As we contemplate an ESOP is is really not how do I want to say this it's not as. 
 
 [9:50] Um important for the shareholders to like the I'm sorry the key managers to understand. 
 Um for instance in my opinion the valuation that the shareholders are anticipating for the Esau because. 
 They had nothing like in a sense they're not really going to be participating in the sale of stock unless they have a prior agreement. 
 That for instance like a phantom program that says in the event that there's a change of control then we will be um provided X percentage of the purchase price so in that scenario they are going to have you know, a a sense of of uh benefit to the ownership transition but if we make um this conversation going towards the assumption that they really are just very good people very good employees that their employee Agreements are even if they they don't have any employment agreements but basically a salary maybe a bonus structure is what you're what you kind of have. 
 
 [10:50] Um in that case I think the conversation around the ownership transition as it relates to the ESOP itself isn't really as appropriate and when it comes up and it and it becomes like hey we want to know more about that I think you you definitely have to talk about um with your key people and and make some time to talk about these things in the process so that you don't leave them hanging and without the right information so I think that's that's a big part of of, you know communicating about the problem is there's not a in our world right there's not like a 1 business culture that we can all speak to and say all right that that's how you should do this right, you I think you first have to start off with what is your what are your core values within your leadership culture and if you don't have any let's talk about that for a second like your core values um are really important, form a leadership perspective because within a few say keywords, like let's just take teamwork and integrity and and which kind of wraps up honesty um you could have you know work ethic you could have um. 
 
 [12:03] You know being a contributor back to the community to our company or to our clients there's so many core values and shaping those in your leadership groups are really important because they do establish. 
 
 [12:15] So I guess some implied rules as far as how we're communicating, not only that it also establishes the who the leadership team really is in terms of uh bringing on new leadership leaders into that group training and and growing existing leaders from maybe outside that key circle of people in from just the normal employee base so who's getting promoted when you promote somebody into that leadership group I think you have to really be um communicative. 
 In descriptive about what those cultural core values really are, now what I think what happens in any organization is what those core values really are are going to um going to expand to the entire company right so if for if for instance you have 1 owner who is super dictator like, and nobody can make a decision without that person you know making the final decision right that's going to lead to a culture, from the key group of people down into the hole rank and file that says hey we are not allowed to be on autonomous and make decisions on our own, um without the key person saying yes or no and so that's not bad I mean wrong or right or wrong it's more of an assessment of what your culture is um we can't, let's go kind of and we're kind of digressing into culture a little bit as it relates to esops. 
 
 [13:44] We can't take an ESOP company or a company go through ESOP and say you know what that's not that culture is not good for us we're going to do a whole new culture that's not the way it works the way it works is we we want to assess the existing culture of the company. 
 And try to what the ESOP does is going to try to make sure that we incorporate the ESOP as a tool to enhance the culture. 
 And the way we enhance the culture with an ESOP is we're basically giving the employees a stake in the value of the business going forward on a long-term basis. 
 So that doesn't replace a culture that is a autonomous or not autonomous or dictator dictator or or you know I can't even say that word right so it doesn't replace that right it only um we only can enhance what's already there. 
 So as we start thinking about communicating what we need to do is communicate um in in the way that the culture existing culture should um you know. 
 Um I guess appreciate or you know be in alignment with so that there isn't like this um so this is an effective level of communication to. 
 
 [14:55] Who you're talking to. 
 Now 1 of the the question that we really answering is like when should we be doing you know this communication and um I think as it as it relates to the spectrum of cultures and let's just. 
 Throw this out from a a good a good hypothetical if my culture is on the Very extreme end of open book management, everybody knows kind of everything you know most of the time I mean it's a pretty open maybe they're not they don't know everybody's you know salaries but they understand the financials there's there's a sense of like we know where the Company's trying to go um that kind of spectrum of like everything everybody in that culture like they just get it like the company the owners and the and the leaders are sharing you know appropriately with everybody on a on a frequent basis so that's 1 culture the other end of the spectrum is, kind of what I described nobody knows anything. 
 Nobody the shareholder the main shareholder knows everything and isn't share and anything with anybody right so keep in mind those are those are going to be part of the way we make a decision on when we should share information through the ESOP process. 
 
 [16:02] And and the goal here is to. 
 You know obviously not just avoid Mutiny right the goal is to get people excited about the possibility of what's going to happen um within the next you know say relative time period of of of from now to the closing and. 
 As we do that we're wanting to again put ourselves back in the in the mindset of the, employees um and then again circling and to the key people. 
 
 [16:33] Some of the things I would say as we stay kind of closer to the management succession side so again keep that separated you know and just say ownership wise there's probably not a ton of people that need to understand that Jen in general. 
 It may your CFO may be involved in that conversation with understanding the valuation and the numbers because they're going to be involved but in general they may not have everybody so we're staying on that that 1 side of what I would say is more pure management succession. 
 The first thing I you have to deal with because we're going to be just talking about the um. 
 
 [17:09] The key managers what's in it for me mentality is we got a nail compensation now. 
 
 [17:16] Compensation in its multiple forms is going to need to be as best you possibly can. 
 
 [17:23] Um established before you bring them into a conversation about the ESOP. 
 
 [17:30] Because I guarantee you they're thinking it if they're not asking it they're thinking it and they're wondering um things like this. 
 
 [17:40] Um let's pick on Bob Bob sold 100% of his stock to the ESOP. 
 And now suddenly he's not working as much after the fact. 
 Or perceivably he's not going to be working as much as he had so I'm key manager. 
 You know let's just call Key manager a um you know I'm Sally and I'm taking over, I don't know exactly what I'm going to be doing but I'm kind of making an assumption I'm an employee Bob selling a stock I'm going to be taking over some level of responsibility. 
 What's what's on my mind well um, how much am I going to get paid how much I've been paid how much am I going to pay I don't even know what the responsibilities are but I'm starting to think about like oh man Bob's not even around I'm doing I'm making all these decisions so I would say in general like if we start thinking about just what is the comp plan of your key people is really going to be important and I will say also. 
 
 [18:38] That there's only so much you're going to be able to do in the process of doing your ESOP for your compensation plan for your key people. 
 Because if we use in the structure of your ESOP a stock appreciation rights program. 
 It's going we're not going to be able to disclose exactly what that's going to look like and even give it a lot of like distinct, um you know numbers behind it until we close the transaction I would say it's virtually impossible and it's really um not. 
 
 [19:12] The best practice right to go and say to your key people hey you're going to have a sar plan and you're going to have all this you know potential upside opportunity um you know you could probably give them the concept of what it is, but when it gets down to the nitty-gritty to get to affect a grant agreement under a sar plan we're going to we're going to need to know after the closing what was the net valuation, that will help determine what the day 2 price of the of the stock is going to be so that then you can calculate an estimate based on the vesting requirement of the tsar and the future value, position of the Tsar what the potential dollar value of that star plan will be many Star plans are going to be built. 
 Um with performance shares and retention shares which means that that key person is going to have the opportunity each fiscal period to vest in the in the Tsar plan based on those requirements. 
 
 [20:13] And they're going to be performance related to the to the normally to the cash flow projections of the company measured by IBA. 
 So in that planning we don't know what first off what the day 2 price is and we are going to want to make some time after the transaction when everything is closed and everything is true up to better understand how, um who's going to get what number of of SAR shares so so 1 of the things about this is communicating that, concept with the idea that that the timeline for them to understand that is going to come afterwards I think the 1 thing that I would say for managers or for the shareholders that are transitioning to ESOP. 
 Is keep this in your communication conversation going like the 1 of the reasons we chose an ESOP is because it's a flexible way for us, to transition the first the ownership part of the stock. 
 
 [21:11] And then secondly trans you know continue our transition with our management succession plan we are not going anywhere, over the next year after the closing and because we're not we want to make sure everything is mapped out correctly and we want to have enough time to Workshop these concepts with our key people to make sure we're all on the same page, that is going to hopefully buy you some time. 
 For the fill in the blank of what exactly that's going to look like now what's going to happen in the planning process is you're going to have to plan you know, from a base pay, for each of these key people and anticipate the base pay with your succession plan if there's a change in your succession plan where they're actually post ESOP going within the next, 12 months that person is going to take on a higher level role of responsibility then I would say you want to anticipate a increase in their base pay. 
 Potentially build a formula for you know what your existing bonuses is bonuses are, and then what they will be going forward after that depending on on again what their responsibility is um it could be titled driven. 
 
 [22:25] In some cases where this is so important you you may have to hire a consultant when it comes to um compensation planning. 
 You know I'm just saying it I don't think it happens like that most of the time because I think people are pretty good at this normally before we do the ESOP but if you if you feel like you need to um it might not be a bad idea to do that so you I think you need to nail down a comp plan that includes. 
 Base pay and profit bonus and then any other element of their compensation that can be nailed down in this conversation before you know as you start to to bring them into the ESOP. 
 Now I would say from a timing perspective once that's really done I would say that I prefer to bring the key people into the process. 
 Before we do the site visit with the trustee and evaluation firm and the reason is is because as a sell-side advisor, what I really want to do is I want to incorporate the knowledge base especially with just you know like I I start thinking about the key people. 
 I want them in the presentation to um have. 
 
 [23:36] Aeso in in in conversation with the trustee I want them to be part of the presentation, with the valuation firm and I want the valuation firm and the trustee both to see the depth of that of that key talent pool right and that we're moving away from just reliance, and dependence on the you know maybe the 1 year older or 2 shareholder or whoever shareholders are. 
 Um if that is the total case right it may not be there right if it's not there then of course we we're not going to do that but that's my preference in the win is to try to bring them in before. 
 The site visit and answer those questions so there there's going to be some things along the line here that we we're going to want to think about as well. 
 
 [24:18] And this is just kind of generally um. 
 I would sit back to this succession plan process and I and I really hit compensation hard because ultimately that's what's in it for them um in outside of that I think you got to anticipate the requirement of what that position means for the individual so. 
 What I mean by that is is you know it's not going to make sense for somebody to become the CEO of a company, that is a very demanding job when they're going through a crisis in their life right of course they were just being kind of common sensical here um you know if their core values are. 
 You know really really um built around hey I'm going to be going to every soccer game for my kid. 
 
 [25:05] And you're going to make them the CEO and have their travel responsibility going all over the country it it's not going to like make sense right so I think you really have to dial into not only um not only can they do the job. 
 Um are they are they qualified are they competent are they good fit are they part of the new future of the company when you're thinking about who the company is going to become uh over the next 5 to ten years are they a good are they good transition for that. 
 Is it going to be a good fit for them in in general as a person and their and their actual whole life or are we asking them to do something. 
 That they feel obligated to do that's not really going to work with say their spouse or their their family situation maybe they have somebody in there, family that you know has an illness and all those things I think are part of understanding that is this really going to work and vetting it out. 
 
 [25:56] Um I think that the hard like 1 of the hardest parts about succession planning in communicating this is too is like you might feel there are. 
 Multiple candidates for a position and there might be some biases about like who who should be really you know that person, there are organizational difficulties that happen, personality wise and you know you might feel like they're a good fit but somebody else in your leadership team isn't going to respect that person so there's Dynamics there that need to be really ironed out. 
 Um I think 1 of the classic uh fundamental things that anybody that does this work is going to tell you is is get started as early as possible, and that takes us back to the ESOP you know I think sometimes people wait and wait for the ESOP to kind of manage through all these succession management succession issues but. 
 I think that's a mistake I think you got to start as soon as possible. 
 Um 1 of the 1 of the personality types of you know when people do this really well and you think huh you know what kind of person is that that does succession planning really well, I think it's somebody that is in a key position and they're trying to help so many kind of come up to the the job that they're doing and they do not necessarily. 
 
 [27:11] Have a um a high level of of of of psychological dependency on that position, so what do I mean I mean they don't really want they don't necessarily they like their job they like what they're doing but it doesn't Define them right and I think that's what I've seen as a problem with people get, caught up with like this is nobody can do the job Louie I did you know no nobody's on the planet as smart as I am in that in that capacity or whatever, um I think that needs to be discussed right and that needs to be thought about so that's 1 of the barriers to doing this succession planning. 
 Early and that's the real advice is get it started early and give yourself plenty of time to do it now. 
 I have done ESOP deals where we have had zero succession planning done so I'm not saying you you can't do it this way and have you know a 5 year plan on succession and then finally do your ESOP um. 
 In the reason I'm saying that is because in those cases basically we're still very functional the company's doing what they're doing the owner sold he's still he is still doing the job that he wanted to do before and we haven't needed to have 1 because it's it's just working the right way. 
 Um it needs to be when you come down to succession plan. 
 There needs to be a hardcore conversation with the people that are doing that job how long do you want to be sitting in that chair to do the job that we have right um. 
 
 [28:39] And I think that's a really you know when I talk about doing it early that can mean 5 years that can mean, you know 24 months before it could mean whatever it is but I think the idea is that you're going to gain some Traction in communication by having these conversations early and that's. 
 That's what I'm talking about as far as avoiding this idea of a mutiny is you've got to have very strong communication with your key people and they got to feel in my opinion that the door is open to anything that they're thinking about you know if they're thinking hey I need I'm I'm. 
 Hitting that like ceiling like I'm totally I've done this job you know maybe I'm the the Vice President of Sales and sales director whatever. 
 And I've done it for this many years and I've done every single thing I could possibly think of it's It's functioning wonderful I've got great people under me I need more of a challenge. 
 If that high-level talented person is thinking that and you're not addressing that and open communication from a succession planning standpoint. 
 
 [29:44] You possibly will lose a very talented person because they didn't you didn't know that they were thinking that so you need to be asking these questions on a. 
 You know a very frequent basis at least annually and saying hey are you know where are you at with with your career and where you're going. 
 By the way do you know we're thinking about potentially transitioning someday to maybe an ESOP, you know what would your thoughts be so those are ways to kind of build communication and really have you know this ongoing open communication that's going to be important. 
 
 [30:15] You know within that you can share the as a shareholder you know kind of just directing this towards the shareholder you can share, like your vision of the legacy of the company now that word legacy with esops is just thrown around gosh all the time right, what is your vision for you know when we think Legacy sometimes we think oh the guy just wants the name the company to be whatever it is for you know 100 years I'm talking about. 
 You know the whole idea of a lot of times when we do esops is there is a there is a purpose and a mission to the company, that we want to be the legacy of that company like we are we are known as a company to be the most reactive um, business in that space with our customers and our customers know that and they come to us because we solve problems. 
 Um so quickly and helpful to their business and we've been known for that that's our reputation and and we want to we want to carry that on. 
 Into the future and what an ESOP does is it allows us to continue the consistency of those efforts from that from that type of Legacy you know standpoint. 
 As the shareholder sharing with a key person I mean these are the things that you want to share with them like hey this is what we're known for this is what we want to keep doing what you think the company should be in the next 5 to 10 15 20 years. 
 
 [31:42] And have those conversations because guess what you know that person might have just incredible. 
 Um insight into technology and how technology really might change the way things might be and and at least you're kind of wrestling back and forth with some of these, um forecasted visions and forecasted values of what the business will be. 
 But ultimately what what both PE you know both parts are doing the shareholder and and the and the key person are there they're kind of forming and shaping you know the company as it goes forward that's Legacy. 
 That's what's beautiful about esops like get rid of These Guys these private Equity Guys these strategic you know Venture capitalists coming in putting all this capital in the company get rid of them because you know what they're just honestly they just care about money. 
 
 [32:28] I'm being super super opinionated there so please um don't take offense but the point is is that they're there to make money on the increase in the per share value and maximize the return, in not saying that's completely wrong I'm saying that but that sometimes in many many times loses the concept of what we're doing so from a vision and a value standpoint that, if I'm a key person if a business right I'm thinking the reason I'm here in the first place is because I I believed in the vision and the values of the shareholders and I want to either I'm going to stay here because I want to continue to perpetuate those and you know what I have my own you know from my perspective my business background I started in Corporate America was able to navigate to an equity position in a in a small company and 1 of the reasons I did that is because I I really think that small companies midsize companies have so much more um level of innovativeness and, they allow people to be creative and Innovative and plug that into the dynamic of the of the way that they're building a future of their company. 
 
 [33:36] Corporate America cannot afford that Corporate America wants somebody that can you know punch in their time clock, you know move through their their processes and procedures and not violate anything and if you do you're kind of like you're not going to be politically advanced in that so organizations and and and frankly that's 1 of the reasons I'm so passionate about esops because we get to retain that type of of passion and and reputation and Legacy in the business I think that's a huge part of the communication part part of management. 
 
 [34:06] Succession is because we want those kind of conversations to be just so normal and frequent in a business when we're going through this process. 
 
 [34:16] So so 1 of the things about the ESOP that we get to communicate to the management team is hey guys this is going we get to keep going right we get to keep going with what we were doing um that everybody really, fell in love with at the beginning when they when they signed on to this company. 
 
 [34:34] Um as we go through the transition process like 1 of the places I I get questions about when should we involve the team I've already kind of mentioned the site visit. 
 Um you know different team members your key leadership team members are going to have a different role to play, um when you get down to it but I would say um as as appropriate through the site visit, get through the closing you're not going to want a lot of transition you don't want a lot of people that are not owners in the in the closing calls before the deal gets closed they're not going to need to be involved in the negotiations but what I would say in the timeline is get them involved, you know when we come out at the closing from a post ESOP standpoint that can happen in a couple different ways that are honestly, really really valuable for everybody involved so you know you can have them involved in um you know being a champion of the ESOP which sounds kind of um, you know nerdy or whatever like yes we you know this is this is going to be good for all of us they could be a champion and a leader on the ESOP committee that comes out of post-closing. 
 They can be responsible to, be part of of the team to train you know if we have some goals coming out of post ESOP within this concept of financial literacy training they could be part of that team so helping you know them coming in and being part of that um is going to be very very helpful but I think. 
 
 [35:56] Have a being prepared I don't know what the the the adages but being prepared obviously is better and if you have a very good idea of who's doing what in the next 12 months. 
 Um and be able to communicate that to you keep people coming out of the transition. 
 Uh are coming out of the actual closing of the ESOP I think that is a very preferential position to be in with with your people. 
 1 of the areas that gets discussed here is also how do you vet. 
 The ESOP with your key people and we'll talk about the rank and file after this because it's post diesel but how how do you actually get on the table issues and concerns um related to the ESOP so that there's, there's a sense of like hey we get this camaraderie wise we understand what's happening here are some questions and and 1 1 thing that's true about, the sap world this is 1 of the reasons we do the podcast. 
 
 [36:51] Is that there just are a lot of misconceptions and myths around ESOP so when people start getting information about esops as employees keep people whether they're key people or employees you have to know that there might be some bad information in there and. 
 So 1 of the things you can do is have some Workshop meetings with your people. 
 And do whether it's key leadership team meeting um have maybe your advisor come in and do kind of a little bit of a workshop with ESOP 101. 
 
 [37:19] And I I've done those where we've done it early in the process maybe even before the site visit um or maybe even after the site visit but just something where hey this is coming together we actually see, as as shareholders we see this is actually happening we want you guys to be prepared so we're going to do an ESOP Workshop. 
 And in the ESOP Workshop we're going to um just explain first off ESOP 101 like what is an ESOP it's a retirement plan you know what do you do like how do the people get shares I mean just basic ESOP stuff that is going to be important to um have them understand so give them a Foundation education like and again I'm thinking my top 5 people my top 10 people my top 3 people whatever that's that's the workshop, now out of that what I would be doing in that meeting or having somebody do for you is to be asking open-ended questions like what have you heard about esops and have you know hopefully there's a a brave soul you know usually in a Key Management Group there's always a brave soul or multiple brave souls that says look I got a question um this is my question and here's my concern. 
 
 [38:26] So when I've done this before I've actually unveiled some you know what I'll call ESOP anxiety within some of the ranks that people that nobody really had thought about on the on the shareholder side because it's not something that. 
 
 [38:40] You know they. 
 
 [38:41] Have put themselves in that position to think about so for instance am I going to lose the opportunity to be promoted in this position that I thought I was getting, that's a huge place of anxiety right so so let's address those and put them on the table and be prepared to talk about, hard things and then some of them might not be hard some of them might be oh you you know this is actually how it works and I think that's a really good way to, um provide solid information around the ESOP and get people up to speed on it. 
 Um I think the last thing to think about is is other aspects of, there of we think I think the problem a lot of times is we we get so myopically focused on ESOP we forget that there's probably other things happening in their lives and so from a, um a key employee perspective and an employee perspective I think it's the idea of understanding the big picture for the employee, and 1 thing I would warn you in this is okay first off in that regard just just be open-ended like just talk about everything that maybe not ESOP related it might have something to do with. 
 You know the the growth of the company the the potential for future advancement in general um you know companies knew like State of the Union stuff for the company so they know what's happening in the company be prepared to talk to those things I think are helpful um and that's I think that's part of having you know a culture that Embraces communication. 
 
 [40:11] But also you know looking at things like 401K versus the ESOP, you know those are some practical things that they're thinking about from a retirement plan standpoint hey what's going to happen to our 401k, hey what's going to happen to this other element of of what we were getting before we losing that or we you know what are we getting here in terms of total benefit you know to the to us as employees so these are good conversations and I will tell you that. 
 There are things that you can talk about with your employee group before the ESOP closest but not to be honest with you not a ton there's going to be a lot more to talk about after the ESOP closest which we're kind of dedicating a lot of space in this year on the podcast to talk about that so so keep all that in mind as we as we think about it um we definitely want to encourage you as you go through this journey to an ESOP um to be prepared hire the right people and so as we as we think about this. 
 You know idea behind um avoiding a potential Mutiny um I think just know that you're not alone that every company has key people every company has an employee group and this is a question that gets asked all the time. 
 So thanks so much for joining today and we will see you on our next step on this journey from janisa.