EP38 - Interview with Danny Massey of Expanding ESOP

In this episode of the Journey to an ESOP podcast, Jason sits down with Danny Massey, Head of Strategy and Communications for Expanding ESOPs--a national coalition working to dramatically broaden employee ownership across the United States. Danny shares how he became involved in the ESOP world, and the conversation dives into the powerful benefits of employee ownership, why it matters now more than ever, and how expanding access can create lasting impact for workers and businesses alike.

Transcript

[0:13] Thank you and welcome back to the journey to an ESOP and Beyond podcast where we seek to make all things related to Employee Stock ownership plans both accessible and understandable. I'm your host Today Jason Miller. And I have a very special guest uh and I'm gonna let him tell you a little bit about himself but today's topic is going to revolve around the impact of esops on workers worker stories. And a little bit of encouragement for those of you that are existing esops uh in in staying the course and the path that you've laid out for for you and your company.

[0:50] And so uh today again very very happy to introduce Danny Massie from expanding esops Danny.

[0:58] Thank you for having me Jason it's uh it's really a pleasure to be here and uh. Tell folks about expanding esops and also uh tell them a little bit about how I landed up. Planted in the uh employee ownership space um I uh was a journalist for a dozen or so years um covering uh worker issues covering the economy uh for various outlets in in uh New York City area uh and then ended up uh. Leaving uh journalism which uh those in journalism said that I went over to the dark side but I went over to like the communication space and I actually thought it was kind of going over to the light side because uh I didn't have to pretend about my beliefs I could kind of. You know talk a little bit about what motivated me uh and and live those beliefs but always you know grew up in in uh. Uh New York City the child of uh Union uh members uh hospital social worker New York City public school teacher and kind of grew up.

[2:03] Uh really with with those values um of of respecting uh people who work hard and believing that. They have a right to to get ahead um and I think have seen in my my life and professional life that too many people who work hard cannot get ahead um. And really have dedicated both my journalism and then for the last uh 12 years after I went to the dark side uh ended up running campaigns uh uh uh and helping with strategy and Communications on worker campaigns, uh primarily uh for workers who didn't have a union uh, and many who couldn't form a union because of various uh legal uh impediments um whether they weren't considered employees they were independent contractors or they worked in franchise systems. That made it really difficult for them to to organize um and so. Spent about a dozen years on some pretty high-profile uh worker organizing campaigns uh most notably the the fight for 15 campaign um.

[3:07] Which launched in New York City uh about 13 years ago with. 200 uh fast food workers who went on strike demanding 15 dollars an hour in a union and. Uh I was there from the start so I know how everybody laughed at them and kind of said that you know Burger flippers demanding 15 dollars is insane like. Uh you know people on both sides of the aisle inside and out. Inside the labor movement uh laughed uh but the workers uh had the last laugh um, uh they you know that demand caught fire um and sort of doubts with what we're going to talk about today um but it was really you know workers.

[3:47] On the front lines out there telling their stories in an authentic way um that I think provided the public uh with a chance to really see into lives that they had uh for so long just ignored um and politicians who you know never would have thought twice about a fast food cook or cashier uh you know and who at the beginning of the campaign wouldn't give them the time of day we're racing to to join picket Lines by the you know even a couple years in and the campaign spread like across the country to 300 plus cities and uh you know 10 years later uh almost half the country is covered by a 15 dollar minimum wage uh. 200 billion dollars in raises for 30 million workers and really kind of gave me a roadmap for how you make change in this country. Um and so I think that kind of brought me into uh the employee ownership space and and the desire to to really see what we could do to, gives this tremendously powerful Tool uh and and really put it in the hands of of more and more workers.

[4:51] Danny I'm always enamored by the stories uh that I hear about how people came into the employee ownership space uh and they're they're varied um and it seems as though particular story in dovetails directly into the work that you're doing today that uh you you've got a progressive background um in utilizing your your talents on behalf of others uh for uh all of the the benefits that many of our listeners know about esops in particular um and your work on uh Collective uh I guess Co cohesive workers right unions in general and then the idea of a a better wage um you know dare we say living living wage or approaching a living wage and in that fight and. The the change that you're looking to implement their 2 2 things I want to point out 1 is that communication is incredibly important.

[5:51] Across all aspects of not just um employee ownership but and worker advocacy but financial literacyand. The change is important not for changes sake but because if if nothing changes nothing changes but if something changes. Something changes and the better that we're able to utilize the talents of folks like yourself that are able to articulate that then you know that change hopefully can continue, I want to kind of pull on that for a moment and go from your fight for wages to what you're doing now with expanding esops and the the idea of employee ownership kind of being uh around protecting uh and expanding a a future Financial benefit uh for for workers and how that impacts their their lives um why don't you you tell us a little bit about the the mission uh or the approach for expanding esops and then let's let's dive into your specific work um and and what's transpired there.

[6:58] Sure uh and I think I think there is a Continuum from the previous uh work I think you know what we were trying to do is make like a a a big bet and a big impact and I think you know the 200 billion dollars in raises uh it was great um I think you know still in touch with a lot of those workers now 15 is not even enough and so you know I think. There's 1. You know you have a lot of economists who who study labor markets who talked about how wages haven't kept pace with productivity um and and I I would say that like even if wages had kept pace with productivity over the last 20 years the stock market has increased by 8,000 percent and so if you don't put equity in the hands of workers like you're not going to be able to tackle inequality uh and all the things that come along with it and so I was really inspired by by that um you know and kind of just seeing some of the stats that we're all familiar with but like the top 1% on 50% of all equities in the country and if you look at you know people of color like it's even worse and and so it's just it's really um.

[8:07] I think like a way to to toto look at what we could do to really tackle big problems in smart, ways at scale and so like that's what really brought me here and enticed me uh to to get to work and try to expand employee ownership and so that's what we're trying to do at expanding esops like. We have a very uh not so lofty goal of making every worker in the country and owner uh and. Uh I think we have a big tent approach like we think that there are a lot of forms of employee ownership that work um I think uh the ESOP is. Obviously probably the most powerful um in in its potential but I think you know now 50 plus years old. Uh you know the number of uh of esops has remained stagnant for for decades um you know maybe the participant numbers have jumped up uh a little bit thanks to um the great work that holding companies are are doing and and bringing uh more more workers into the fold that way but I think. Everybody would agree that that um.

[9:14] More needs to be done and so we're really trying to look at some of the roadblocks uh stopping companies from uh from forming esops and then seeing what we could do on the policy front uh to unlock uh you know unlock uh more esops bye bye. Just uh you know casting those those roadblocks aside and so really focused on um. Both uh the legal risk we're focused on uh figuring out how to. Uh make tax incentives work for all different kinds of companies I think uh Ruckers folks have done some really interesting work on where the majority of wealth uh has been produced by esops over time and it's actually. Through uh small esops at big companies and so that really has waned in in recent years and so we're trying to see what we could do to unlock that again.

[10:07] Um and and so we're really you know uh engaged in in in in building a coalition I think um. How are 1 of the most exciting pieces of of my work so far is just getting to be in touch with everybody that's been so committed um to the employee ownership space for. Decades um and bringing them together uh and I think it's probably the first time that the communities come together. To focus on expanding esops like that's the Shameless plug on our name but but um also it's it's it's really uh it's exciting to see um the energy uh in the room for.

[10:46] Uh putting heads together putting some of the the sharpest legal and policy and. Uh structuring and finance Minds together to see what we can do um. To bring this benefit to more and more people um because the problems are are.

[11:02] So manifold right now in in our economy I think like just the studies that you see about young workers um and the fact that they, you know entire generation has basically given up on the American dream they don't think they can live lives that their parents lived um you know you have the previous presidential election that was, you know totally you know run on the economy and and and uh I think you know you see some of the approval numbers of the president now and the economy being clearly uh something that is squarely um uh on people's minds and so I think like we have. Elegant solution if we can figure out how to put this uh Power of employee ownership into more and more hands I think you know we not only solve um. You know some of the inequality things that we discussed you know a couple of minutes ago but also get to some of these more fundamental issues about like people's belief in our country and our democracy in their ability to live the lives of their parents and and grandparents lived.

[12:10] You said a couple of really key things I'll agree with you on the energy uh in in those those rooms from the the uh professionals and and legal minds and all all the people that you mentioned coming together to figure out like how how how can we do this uh how can we do this more better uh what is it going to take and what what can we do to help um and that that's been a kind of contagious energy for for me uh as as wellthe other thing that I was shocks to hear early on a couple years ago in uh from from this uh was that that inequality from the equity portion like what is the biggest uh differentiator between those who have wealth and those who don't and it's Equity ownershipum and that that could be any any Equity right but then when you look at the individual um.

[13:07] Who who is investing whether it's access through a 401k whether they have their own brokerage or an IRA um that the number of people who in invest in public equities. I think 1 of the unique Parts about what we the work that we do in employee ownership is I don't know that folks have considered the idea of their own company. Their own equity uh that could be available and unlocked through an ESOP or uh an eot uh or a worker Co-op and there's other things that you've mentioned and I don't know that America in general thinks of small business as Equity availableuh to workers or what impact it would even have.

[13:50] Um and on on that note talk talk to me uh talk to us about your the the work that you've taken um and the stories that that you've heard. And how that's manifested uh in the lives of workers who work for an employee owned companyyeah and I think it it the the approach.

[14:11] You know comes directly from what I learned with with the fast food workers on the on the fight for 15 I I uh I remember um actually like a uh conservative think think tank uh doing like a kind of was a little bit of an innocuous hit piece on me and a Burger King worker uh and you know the whole gist was this Burger King worker was talking about how he couldn't afford shoes for his kid and then she happened to find like 5 other. Fast food workers saying that they also couldn't afford shoes for their kid and was trying to make the argument that like this Burger King worker with a PR you know person was telling them to talk about shoes for their kids and like I didn't tell them to talk about shoes for his kids he was talking about his life and the fact was that he couldn't um afford shoes for his kids and neither could the other people who also also said that and so I think the. You know just having people talk about their experiences like in public forums is the only way that change really is going to happen like I I think like. You know change doesn't happen like people don't wake up in Washington 1 day and say like oh we're going to change a policy right like they have to be driven towards doing it and the most effective way of doing that is to have people in motion speaking out and and so that's what we're trying to do here um I think we.

[15:35] Basically are just being facilitators but these these these stories are there are so many stories and they're fantastic and it's it's the best part about my job um getting to travel across the country meet these workers um and and hear their stories and there's just like so many different categories that you kind of hear about how the ESOP affects their lives um and so I I can kind of maybe break some of those down I think yeah because it's it's been really interesting I think 1 is just like.

[16:08] Kind of confidence and just you know you have people who never had a job before that they like, um they kind of you know moved in and out of different things there was a woman who had worked in the fast food industry for a long time in California. Uh and then through a friend happened to get like an entry-level job at proponent which is an aircraft parts manufacturer. Uh Global I think it's the largest independent uh aircraft uh parts manufacturer in the world um and she just took off from there like the the whole people taking her under her wings and you know ends up telling you know telling me that. Uh sure the money has been nice but the best thing about the ESOP for her has been the way that it's giving her more confidence and self-worth and uh uh let's see that she never had when she was working in a fast food restaurant she couldn't get enough hours she could you know was always yelled at for like the smallest things by obnoxious bosses and so really just kind of that that sense of self um I think is is something that came through there was another uh, employee owner in Denton Texas at a company called Web Industries and he actually makes blankets that go over engines that get shot up into outer space on rockets and you know he.

[17:22] Was working odd jobs into his 40s was his latest 1 was at a moving company he got laid off he was unemployed like he didn't know what he was going to do. It's a lots of jobs got a call from web and it totally changed his life like he learned how to make these like really elaborate blankets that go on rocket ships um and he said that like you know.

[17:47] I always knew that I was worth something but being an owner made me feel like I was worth more um and that that that you know that is the feeling that I think really shines through in in all of the the workers that I've uh I've gotten to meet and they have really done an amazing job of telling their stories we've.

[18:06] Help them publish like almost 50 op-eds this year and papers all across the country um and I I think I just wanted to start with that because I think that's like an intangible um that's maybe not often talked about like everybody talks about retirement security and everybody talks about like increased retention and how it's good for the you know but but I think like this notion that uh that that folks feel like they're worth more um is is really powerful.

[18:33] We've had um a number of conversations and have shared a lot about identity and employee ownership and in esops and how that helps facilitate that and when I I listen to you describe that that confidence and that progression it's it's the difference between uh working for someone to working with someone to kind of working as someone um on this ladder of this this is me this is mine this is ours uh from uh and instead of. Work life and work identity being separate from personal identity enhance enhances both is what I found in in working with ESOP companies and um that's what what stood out to me is as you were talkingum.

[19:21] So that that's quite quite a bit of traveling and and a lot of uh a lot of interviews and thank you for for sharing those those 2 stories um.

[19:31] What. Have you um have you talked to Founders Inn in your Journeys as well yeah absolutely um, trying to get a sense of their motivations and and selling um their businesses um just met 1 uh Brent Hutchens uh who uh. Owns didn't found but owns a uh a boat manufacturer in southern Oregon um and he.

[20:08] Sold it and thought he had left it set it up for great success and that it would live on and found like a you know uh what do you thought was a responsible buyer and 1 of his board members right before he sold the company said you know this company is going to close within 3 years and he was just like no no wait why would you say that like I you know it's profitable it's doing great like we left it in great shape and um like clockwork like the company was padlocked and and he never got over it until many many years later when he.

[20:42] Found this uh this opportunity at the at the boat manufacturer uh and.

[20:48] Turning that into an employee owned company has like.

[20:53] Helped him kind of get over what he felt was like the biggest mistake that he ever made in his life and the 125 jobs that were lost in the community that was destroyed uh and and and. It's been such a powerful thing for him um he said that like the the ESOP you know it's only I think about 10 years in but for the majority of his employees it's the biggest asset they own um and. Average ASAP balances over hundred thousand dollars already and you can just see how it's it's changed their lives and so and they're only at like a 30% now but he does have plans to go uh over time to 100%. Um and he it was really interesting because he I found them because he just.

[21:37] He's so happy with the result that he just wants to tell everybody about it so he found me and we figured out a way to like get his story out there a little bit um but he wants to help. Other owners like turn their companies into employee owned companies so that was that was a great 1 and then uh Doug bowel who's the chairman of the board of um. Jasper's engines and and transmissions and Jasper Indiana I think it's probably like the 26th largest ESOP in the country and it's grown so much over the years uh he started working for the original founder selling cars door-to-door um which I had never knew was actually a thing and. Uh it sounds like it was sort of just the test for him and like they were amazed but he was actually able to sell like 7 cars door to door and and then they gave him a job as a dealership and kind of led to you know uh him many years later uh buying the company turning into employee owned company and the thing that was interesting about their um.

[22:37] And that's that tells a little bit with the the the worker stories but they um require every employee um to come up with at least 4 ideas a year to save uh the company money and they get 20,000 across their like 4,300 workers um and this was another thing that I I I heard everywhere um in terms of themes from the the Frontline workers just the the motivation to think and act like an owner and uh and come up with ideas big and small um that helped to save the company money there's a guy and South Dakota who works at Central States who talked to me about how he. Came up with a new way of cutting metal to reduce uh scrap that's now used across the entire uh company um which is in 11 different or 12 or 13 different states now um you know there. Sort of touching ideas about how companies during Co avoided layoffs by coming up with ways uh.

[23:36] To save money um and the the best the best that I heard was uh uh ah uh uh defense contractor and Elgen South Carolina called Ambac International and the workers got together and they fired the landscaper um and they bought a lawnmower and they started mowing the lawn themselves they didn't Furlow anybody they didn't let anybody off um and the landscape or happen to be at the CEOs brother so they just were ruthless and and and did that and so um and you know another year they they forego they uh they gave up raises um because they wanted to buy new equipment um so that there would be more competitive in the marketplace and then that new equipment helped them be more competitive and then they were able to give even higher raises a few years later and so things like that um have been really fantastic to hear and I think like. Every company has an idea I think when it's done right um uh it's really uh, remarkable the Buy in that you get and the ideas that come like both big and small um there was another guy who you know in a a uh.

[24:44] The customer like got some product that was like damaged but they needed it for. Like eminently for the weekend and he got in his car and like loaded the replacement parts like from the trunk like all the way up to the windshield and drove 3 hours to like bring it to the customer and like you probably. I mean you definitely would not see that in any other kind of company and so um I think the Buy in um somebody told me you know like uh we're working for a company but we're also working for ourselves and so it's it's really um great to see and then I think of course just you know. We not to gloss over the Financial Security because that is life-changing for every I mean every all the 50 people I talked about the life-changing uh Financial Security uh. Everybody's got a different story some you know 1 person whose wife had a stroke and this just like provided so much security for them she could no longer work like he was able to retire and take care of her um the you know person with a daughter who was born with a disability who knows that.

[25:48] There's this account that is when he and his wife are gone like is going to take care of her um. That's I mean so many people you know it sounds like cliche but they're just like this is priceless and it is priceless like you can't. Think uh you know and and so like how do we bring that to more to more people and so I think like getting these stories out as a as a great. Uh first way of doing that um and you know when the time comes you know we will have.

[26:14] A bank of 50 plus stories to like go to members of congress with to say like hey like this is what you can do you can bring this to more people. Mentioned 2 a number of different important things but to stuck out to me as you were talking and we when we work with clients that are interested in learning about esops for themselves and for their company um but this latter part of that comes with some level of disbelief. And uh not not just the financial benefits again not to gloss over those uh but how they asked the question how is this going to manifest for me and for for my company for my employees for my leadership team like what is it going to look like. And the stories that you just shared about what it what it could look like um are unique to those companies and to those cultures and it's really hard to say hey when you do X you're going to get. Why right if you add 2 and 2 you're going to get 4 or and if you want to do expressive math you know 2 and 2 becomes a 100 uh with the the magnitude of of employee ownership.

[27:24] Uh but you sharing those stories or just other ways for our listeners to hear hey this is how this this could happen over time yeah and it over time I think is a criticalpiece of it I think 1 of the1 of the. Powerful things was seeing that companies that have been employee owned for a while how the generation that kind of sees their account balance.

[27:50] Brings that knowledge to the younger Workforce um and that's really tremendous um and that, you know they start seeing people retiring and you know with 6 figures 7 figures sometimes even uh accounts um you know 1 guy said you know the truck drive you know there's a sign. In their in their break room that says the million-dollar truck driver and it has this story um and that was that was where he first caught his attention that this thing could be could be really powerful um and so I think like uh.

[28:22] Those those things are are really valuable I mean I think there was. Keith Dixon who was homeless living in a Walmart parking lot when he got a job at uh he was living at his car like and got a job as a part-time sort of scrap metal at ambach which is the company with the lawnmower story that I talked about before um and he just said that you know he was supposed to be a temporary job but these guys were all owners they'd all been there a while and they were like if he's here we're going to bring him in and so they taught him everything and he learned the way the company operates he saw the books like he had, basically never had a job Beyond like a candy store and so like that was his only previous employment and uh he's now the manager of the company's entire uh supply chain and it's like a very. Yeah significant like Federal uh military contractor so I think like those kinds of of stories of transformation um you know and then kind of starting where we where we where we going to where we started uh and and talking about the American dream again um.

[29:32] I talked to a guy Brady Fox and Vermont who works for a company called uh PJ construction and he's young this is his first job is an engineer um and he said something which stuck with me it was 1 of the first interviews that that that I did and he talked about um how he was the only 1 in his friend group who likes their job and you kind of get at this notion of like a young cohort that is you know gen Z like. You know study after study survey after survey show that they they are.

[30:04] Basically giving up on on on the economy on capitalism on uh uh on the American dream and and I think Brady's Story shows that like if you can. App employee ownership you can you can really uh uh start to address that issue um Ronnie Klein John's and other worker uh in Grand Rapids Michigan all of his parents Aunts Uncles grandparents worked for major manufacturers in the Auto industry and those jobs just like didn't exist when he entered the workforce and so uh they had a pension they had you know all the things that he wasn't going to have he started working um for a roofing company for many years like no pension no you know no retirement security and then uh landed a job at a a truck parts company um called Weller that actually ended up getting bought by Jasper, Transmissions the company we talked about previously and so he became an employee owner overnight and it's totally changed his.

[31:14] It's giving him the belief that he can have the lives that his parents and grandparents and uncles and aunts have who used to have these good manufacturing jobs with Union pensions that don't no longer exists and so we can kind of create that security of yester year today if we uh figure out a way to to um scale employee ownership.

[31:38] There's so many things that we could talk about for so long in in these stories and I I love that um the story of the worker going from the parking lot to the head of of supply chain and that that comes from in investment. And the employee not just from the the owner of an individual company but from all owners and all leadership for those that that bring them in the the possibilities of a strong and healthy culture I think are magnified in an ESOP company or in an employee owned company because everyone has the same Stakes andthese uh these stories aren't just inspirational um and they're also not anecdotal right you've gone to dozens of employee owned companies and you hear different stories but with common themes about how these have impacted individuals livesand. 1 other item earlier when you were talking about the fellows at Bruce for that worked for the Boating company now.

[32:47] That sold his prior company um and that that was his his largest regret. Um and I'm not saying that uh the sale of a company not not to an employee ownership structure should be something that that's regrettableum but there is a a very significant statistic that typically within 1 year after a transaction many Founders it's like 3 and 4 regret. Some measurement of the sale and it's usually not the number uh it's usually the the method or the outcome that creates this sense of we could have done differently or or better and my my comment to listeners to Founders and owners in that space now that are entertaining the idea of of an ESOP exit is continue down the path of exploring it in Earnest for yourself and not just be an item of curiosity but give it the same level of intention and vetting that you would for any type of exit until you get the answers that you need for yourself.

[33:50] Because it does have the potential to impact dozens if not hundreds if not thousands if not tens of thousands of lives in the future for for an ESOP company.

[34:04] UmDanny I I think anyone listening can can hear the the the passion in your voice uh not just because this is what you've done which is always communicate. Related to this but that these stories have possibly had a personal impact on you um share with our listeners a little bit about that if you wouldyeah I mean I thinkuh.

[34:31] I go back to Kevin Sims I mean I I think that that story uh he worked he's the 1 who makes the blankets for rocket ships uh and. He grew up really poor single mother she cleaned houses umand.

[34:51] He had nothing growing up uh. You know drove a dump truck uh drove a moving truck uh and just to see that transformation I think uh you know I think the stories like you talked about the scale and you talk about the numbers I think like the stories are are what.

[35:09] Ultimately we'll move people towards the change that we need to put this in everybody's hands and I think like. The other thing that I think really hit me is is the the multiplier effect I think like there's probably. And it's hard to study but you hear all of these stories so like small towns in Iowa and Indiana. Where people are donating to churches they're donating to you know the YMCA they're donating to the Arts Center. Uh it's really having an impact on these towns um and so I think. Uh I think there is uh an effect that goes beyond just like the individual worker where you're building like a more cohesive Society. Uh uh as a result of this when it's done right um and I think.

[35:54] You know and I think like for me like wanting to wanting to be involved in things that are are successful and that have a chance of winning and I think like. The fact that this is something that everybody agrees is great and like we just need to agree on on like how to get there um. I think is is really enticing because the hard part like I'm used to like fighting these battles where like nobody wants to. You know sort of running up against against the brick wall and and here. You're starting at a point where everybody's like oh this is great um and so.

[36:27] That's the challenge right like that I would issue to everybody okay it's so great like it's so incumbent on us to figure out how to do more of it.

[36:35] That's a really really great way of of expressing thatDanny, what would you say to uh our our Founders and uh owners that are listening if there's 1 last piece of either direction or advice or Revelation that you haven't shared so far.

[36:57] I would say to do it I've done because I didn't know a lot about employee ownership when I started this job I I would say.

[37:04] Talk to employee owners talk to uh folks who've sold their companies to uh to their workers um. And I think after doing that you're gonna have a hard time. Uh going down that road um so I think like to I think that's that that would be the advice I would have for them. Very good well Danny you've mentioned uh the these. Op-eds that you've helped to to put together that you've put out there I've seen a lot of them as you share them on on LinkedIn how can our listeners find them how can they find you how would you like for them to interact with with you um how how can we give them that that chance or that shot. Yeah great uh we are 80 plus organizations now so come and join our Coalition you can find us at expanding esops com. Uh or on LinkedIn um expanding esops on LinkedIn um where you can contact us there um I will get back to you Same Day most likely and. Uh we're trying to build as big a tenth as possible we have uh investment Banks and service providers and you know all the valuation companies and lawyers and academic institutions and ESOP companies and and really we're trying to um include everybody and there's a lot of excitement so um join us.

[38:33] Awesome thank you there is a lot to be excited about and Danny thank you so much for joining us today and sharing your story and sharing the stories of othersum and listeners thank you again for listening in uh and we will see you next time on the journey to an ESOP and Beyond podcast.