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We have written before about how common it is for previously family-owned businesses to become ESOP-owned. Of course, it is also not uncommon for a business to be BOTH family-owned AND ESOP-owned (i.e., the ESOP owns only a part of the company). 

Why is this a common phenomenon?  As demonstrated by Georgia Theater Company (GTC) earlier this year, families who own businesses care about the two “Ls”:  loyalty and legacy (loyalty to employees and the legacy of the business).  Founder and CEO of GTC, William J. Stembler, recently discussed why he decided to sell 100% of his business to an ESOP:

"Our employees are the foundation of Georgia Theatre Company.  By transitioning to an employee-owned company, we are empowering them to play an integral role in the company’s future. My family and I are grateful for this opportunity to reward our employees for their hard work, loyalty, and contributions by creating the Employee Stock Ownership Plan [ESOP]."

 Growing from a $5M revenue company, GTC now has 700 employees and revenue surpassing $75M annually.  The ESOP option was also appealing to the Stembler family because it allows some family members to remain on the board of directors as well as in key management positions.