How a Specialty Contractor Used Employee Ownership to Secure His Team's Future

Matt Palmisciano had a problem that many successful specialty contractors face. As principal and selling shareholder of FORJAK Industrial in Circleville, Ohio, he'd built a thriving business founded in 2001 by Adam Logan. When Matt joined in 2015, the company had three distinct divisions: commercial exterior painting, commercial concrete restoration, and industrial blasting and coating with their specialized blast plant facility.

But success brought challenges. Matt's leadership team wasn't always making owner-level decisions when he wasn't around, and like many construction workers, his employees were approaching retirement without adequate savings. He needed a solution that would solve his succession planning while taking care of the people who helped build FORJAK's success.

Eighteen months after implementing an Employee Stock Ownership Plan (ESOP), Matt's sharing what really happens when specialty contractors choose employee ownership.

Why Employee Ownership Made Sense

Matt's journey started with practical business challenges. After joining in 2015 and driving significant growth alongside his partner, both owners faced transition planning by 2020.

The biggest issue was motivation. They needed their management team to think like owners even when the actual owners weren't on-site every day. Traditional bonus programs weren't creating the long-term thinking they needed.

Coming from a finance background, Matt saw something troubling in construction. Many hardworking employees reach retirement age without enough savings. The ESOP structure offered a way to create real wealth for people who might not otherwise achieve financial security.

What Actually Changed After the ESOP

The results surprised even Matt. Daily operations remained largely the same, which he considers positive. FORJAK continues focusing on their core values: developing their team, serving clients well, and solving problems collaboratively.

But the thinking changed dramatically. The middle management layer now focuses on ownership-level decisions, understanding how their choices directly impact both company value and their personal ESOP accounts.

Financial decision-making improved across the board. Employee-owners think differently about spending and protecting margins. They understand that additional dollars left at year-end flow directly into their ownership accounts.

The tax benefits proved substantial. Operating as a tax-exempt entity, FORJAK now retains approximately 30% more cash flow that previously went to taxes, providing significant resources for growth and debt service.

Building Trust Through Smart Communication

FORJAK established a communication committee including both field and office representatives, ensuring all employee segments have trusted advocates explaining ESOP benefits.

Matt explicitly encouraged employees to research ESOPs independently and challenge the explanations they received. This transparency built credibility by inviting scrutiny rather than avoiding difficult questions.

They carefully managed expectations about early-year values, emphasizing that meaningful growth would require several years. This under-promise, over-deliver strategy created positive surprises when first-year values exceeded conservative projections.

Real Impact on Hiring and Keeping Good People

Eighteen months in, Matt sees the ESOP functioning more effectively as a retention tool than a recruitment advantage. Job candidates without previous ESOP experience don't fully appreciate the long-term wealth building potential.

However, the retention benefits particularly impact foremen and junior managers who might otherwise seek advancement opportunities elsewhere. These employees recognize the substantial long-term value potential in staying with an employee-owned company.

Matt anticipates recruitment advantages will increase significantly around year five when ESOP account balances become more substantial and current employees can serve as authentic advocates.

Practical Advice for Other Specialty Contractors

Based on his experience, Matt offers straightforward guidance for contractors evaluating employee ownership. First, honestly assess whether ESOP aligns with your ownership timeline, financial situation, and succession goals. The decision requires total commitment to the employee ownership model.

Focus on post-transaction culture development, not just the transaction itself. Success requires sustained effort to educate employees, change behaviors, and create the ownership mindset that drives performance improvements.

Finally, invest in experienced ESOP advisors who understand construction industry dynamics. The complex transaction and implementation requirements demand professional guidance.

Matt's experience with FORJAK Industrial shows how specialty contractors can successfully use employee ownership to address succession challenges while creating substantial employee benefits. For contractors facing similar decisions, the combination of financial advantages, cultural transformation, and long-term wealth building makes employee ownership worth serious consideration.

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