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Earlier this month, Philly.com reported that The Graham Company, a Philadelphia-based insurance agency (and one of the country’s 50 largest commercial agencies), made the transition to employee ownership through an ESOP. Owner William A. Graham IV revealed that he was offered up to $230 million for the company, based on its low fixed costs and strong cash flows. However, Mr. Graham acknowledged the cost of selling at a price exceeding four times the company’s revenue, as “[p]eople have to leave, for a firm to stay solvent, if it’s sold at that price.”

Instead, transferring ownership to employees through an ESOP preserves “the Graham way,” which emphasizes a commitment to investment in employees. As vice chairman Michael Mitchell observed, “Our culture does not get destroyed because someone buys us and squeezes to get another five bucks from the bottom line.”