“What an ESOP is probably at the highest level, is a wonderful retirement plan for employees of an organization, “ said CEO Scott McGohan. “As they retire and evolve out of the organization, they get equity in their organization and paid out over time.”
The model was almost unknown before 1974 and now about 6,460 companies have this model of ownership set up, according to the National Center for Employee Ownership.
McGohan Brabender was founded in 1972 by Pat McGohan, and the employee benefits brokerage now has grown to not just the Dayton-area, but also with branches in Cincinnati, Columbus, and Indianapolis.
Scott McGohan said that other companies like theirs have been acquired by larger firms or private equity and this employee-owned model was a way to stay local.
“We just always wanted to have a company that was anchored in each community,” he said.
Private equity companies have grabbing up other smaller firms in recent years. Trade publication Insurance Business Magazine reported in 2019 that insurance brokerages were recording high merger and acquisition deal volumes, driven by private equity, and Insurance Journal reported merger and acquisition deals were up 20% in 2020 compared to 2019.
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