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HR Magazine, August 2003 - Compensation

By Chris Tyler  8/1/2001
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HR Magazine, August 2003

Vol. 46, No. 8

Out of Options

The Benefits of Striking the Right Balance

Strike the right balance among the various employee-ownership options, and you could find yourself with an energized workforce, executives with a long-term stake in the continued success of the company, and a team spirit that comes from actual ownership instead of straight salaries, experts say.

Just ask Bill Scott of SAIC (Science Applications International Corporation), a research and engineering firm in San Diego that offers a host of ownership options to its 38,000 employees worldwide. Scott joined as the companys most junior guy 33 years ago, and, now, as a senior scientist in Rancho Bernardo, Calif., has accumulated so much stock he barely knows what to do with it all.

Along the way hes benefited from the firms employee stock ownership plan, from direct stock purchases, from stock bonusesyou name it.

Its the right way and the best way to run a company, says Scott. That way everyone gets to share in the successes.

Other companies may want to consider following in the footsteps of SAIC, which offers employees a smorgasbord of ownership options. These include: an employee stock retirement plan; a 401(k) plan; various stock-purchase initiatives, including a first-time buyer program, where the companys matches exceed what employees buy in stock options; and bonus programs, in either cash or stock.

SAIC may be an extreme example, but employee ownership is ingrained in the companys culture, ever since founder J. Robert Beyster, who also created the Beyster Institute, decided that the firm should belong to the people working for it. He saw his own holdings drop from 100 percent to 10 percent in the first year.

These programs help employees buy their homes and put their kids through college, says Ron Zollars, SAICs director of public affairs. So its just a fantastic incentive.

In return, SAIC gets successful employees like Bill Scott.

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