Company Profile
Anson Industries, Inc.
Company Overview
Our companies have far-ranging capabilities and provide the highest quality work, at competitive prices, with scheduling flexibility to meet the most difficult timetables. A brief overview is outlined below for each company. For more information or to peruse projects, please visit any or all of our companies' Web sites at: http://www.AnningJohnson.com
Anning Johnson is one of the largest specialty contractors in the United States. Through seven Regional offices, we offer a wide range of contracting operations to general contractors, owners and developers with emphasis on drywall systems, acoustical ceilings, framing, carpentry, metal deck, EIFS, lath and plaster, insulating concrete roof decks, spray fire-proofing, painting and decorating.
Restec Contractors Inc has built a strong reputation in the San Francisco area for their expertise in environmental abatement services such as asbestos, lead, mold and hazardous material removal.
Company History
Company Facts: Harold Anning and Ernest Johnson founded Anson Industries in 1940. As executives at USG Corp. Mr. Anning and Mr. Johnson decided to strike out on there own. The two men bought the marketing division of then Chicago Based USG. From a tiny storefront in downtown Chicago, the company has grown to one of the largest specialty subcontractors in the United States. Anson Industries offers contracting operations through seven Anning Johnson Regional offices located across the country, the Restec Contractors business unit in San Francisco and the Vertecs regional office in Seattle. At each regional office there is a complete sales and project management and support staff to provide the best possible technical service to architects, general contractors or owners. We offer a wide variety of construction operations including: metal framing, drywall, accoustical ceilings, spray fire proofing, structural framing, structural decking and siding, metal deck roofs, insulating concrete roof decks, etc.
Notable Accomplishments / Recognition
You're the Boss,
New accounting rules may reduce the number of employee-owned firms. But Anson Industries sees the benefits far outweighing the costs.
By ANDREW BLACKMAN
Staff Reporter of THE WALL STREET JOURNAL
April 11, 2005; Page R5
For Ryan Till, a salesman at Anson Industries Inc., it's just been one of those days. The Chicago construction firm is trying to win a big contract, and Mr. Till is responsible for landing it. He worked through the weekend, and now it's Tuesday and he's hardly slept for 48 hours. The phone keeps ringing, and he enters into long, complex negotiations revolving around gypsum drywall.
His cramped office spills over with paper. On the long, sloping draftsman's desk, huge rolls detail plans for this project and others, and strewn over them are pens, a couple of calculators and a half-eaten bag of Fritos. On a shelf, trophies proclaim that he achieved "Most Sales, Chicago District" for 2002 and was a member of the "Two Million Dollar Job Gross Profit Club" for 2003. But today, all that matters is the drywall, the contract terms, the city permits and a million other details that have to be ironed out.
Mr. Till admits his job can be stressful. But he keeps going, partly for the awards and the bonuses, but also for another important reason: He has more than 75% of his net worth invested in company stock. Without that, he says, "I definitely wouldn't work Saturdays and Sundays and holidays like I do now. It helps to motivate you that last little bit, just when you're starting to think, 'Why am I here?' ”Many of his colleagues at Anson are in a similar position.
Wholly Owned
While thousands of companies offer up various forms of stock ownership, including share compensation and stock-option plans that are facing regulatory changes, Anson Industries differs in an important way. It is one of a small minority of firms wholly owned by its employees -- employees who have bought each and every share with their own money.
"In my opinion it's the only way to go," says Anson's chief executive officer, John Andrzejewski. "We don't offer state-of-the-art products that you can't get elsewhere. What we offer is the abilities of our employees. If it's a difficult job, I rely on my employees to take the right steps to complete it. I can't oversee all the employees, so I have to rely on them to make the best decisions in the interest of the company."
The tradition of employee ownership stretches back to 1954, when the former owners retired and offered the remaining managers a chance to buy them out. They did, and put a rule in place that only employees could own the company's stock.
Just a handful of managers took part in the early years, but today 95% of Anson's 158 full-time salaried employees participate in the program. Ownership is broad, although several long-serving senior executives have accumulated large stakes: Mr. Andrzejewski owns about 15%; the chief financial officer, Dave Brueggen, also owns 15%; and the treasurer, Ken Wejman, has about 7.5%.
Every two years Anson, with annual revenue of over $200 million, makes an offering of stock, based on the book value of the company, and employees purchase shares. This year's offering was priced at $76.52, the book value per share as of Dec. 31, 2004.
With a few exceptions for medical emergencies or down payments on homes, employees hold their shares until they quit or retire. Recently, Anson introduced a rule allowing employees age 60 or older to sell 10% of their shares a year until retirement. And when people leave, their stock is offered for sale to other employees or purchased by the company.
Employees are investing for the long haul, Mr. Andrzejewski says, expecting to
accumulate stock over a lifetime rather than have it sold within a few years.
And over time, with steady buying and almost no selling allowed, the stock can accumulate for any worker. One administrative assistant says she bought shares for more than 30 years, just "putting in for whatever I was comfortable with" each time they were offered. She has now accumulated 9,000 shares -- with a value of nearly $700,000 at the latest price. "It's a lifetime career for me," she says. "I've never had a reason to leave."
Another employee, benefits manager Carol Haisoch, has been at Anson for 43 years and has 6,100 shares, with a value of almost a half a million dollars. She sold some shares 20 years ago to buy a house or otherwise would have accumulated more. She says owning stock makes a difference to the way she sees her job.
"You have a different attitude," she says. "You're not just doing your job and going home. It doesn't stop there. Everyone here has the same attitude because it's our money."
It makes a difference, she says, in something as simple as buying a new paper shredder. At some companies, workers would just order the best -- and most expensive -- model, she says, but Anson went with the middle-of-the road one that would do the job. "Because it's our money," she says, "we're more conscious of what we're doing. We make sure it's right."
Motivated by Ownership
Research supports the idea that employees are motivated by ownership. For their book, "In the Company of Owners," Rutgers University professors Joseph Blasi and Douglas Kruse and co-author Aaron Bernstein looked at 70 studies over the past 25 years. The trio found that broad-based ownership and profit-sharing programs improved many companies' performance. In the year ownership programs were adopted, companies increased productivity on average by about four percentage points and maintained that gain over time. Profit, as measured by return on assets, return on equity and profit margins, rose 14%.
There are now some 11,500 companies offering Employee Stock Ownership Plans (ESOPs) or profit-sharing plans primarily invested in company stock, about 2,200 401(k) plans primarily invested in company stock, 4,000 broad-based stock-option plans and 4,000 stock-purchase plans, according to Corey Rosen, founder of the National Center for Employee Ownership, a nonprofit research organization in Oakland, Calif.
Some compensation experts expect those numbers to decline, however, as accounting rules on many plans become less attractive. "A lot of the mechanisms for creating employee stock ownership are going to be cut back," says Ira Kay, head of the executive-compensation consulting practice at Watson Wyatt Worldwide in New York.
That's unlikely at Anson, however. The company's stock plan has always been as simple and direct as possible. Employees buy shares with their own after-tax dollars; there are no stock grants or options for executive compensation, and the company even forgoes the tax benefits of ESOPs.
"Anytime people do things with their own money, they're more critical and have greater demands to see, 'Am I getting value for my money?' ”says Mr. Brueggen, the CFO.”If you give someone an option where they don't have to put money out, it doesn't necessarily have the same value. They might look upon it as a good thing if it pans out, but they don't have any individual risk."
And many employees took big risks to buy Anson shares. Mr. Wejman, the treasurer, says he first bought the stock by borrowing against his life insurance. Then, at the second offering, he raised money by borrowing against his mortgage, and the third time he borrowed from a relative. After 20 years at the company, he says his investment has paid off "exponentially."
It's largely the belief in the importance of employees putting their own money down that makes the company stay with a method of stock ownership that many regard as outmoded and inefficient.
"There are more tax-efficient ways of doing it," says Mr. Rosen, "such as ESOPs, 401(k)s and stock-purchase plans." Another problem is the paperwork that has to be filed with securities regulators in every state in which the company offers shares. "It's expensive," he says. "You have to go through the securities compliance that a lot of companies don't want to do."
Pay the Taxes
Mr. Andrzejewski recognizes the tax and compliance issues and says Anson's auditors have suggested moving to a more tax-efficient ESOP plan. But he says the company decided against it because it would mean moving away from the direct cash purchase of stock by employees.
"We felt it was worth paying more federal taxes to maintain the element of having their own skin in the game," he says.
Of course, having skin in the game is fine when things are going well, as they have been at Anson. Indeed, much of the power of the ownership program comes from the fact that the stock has appreciated every year in the past decade or so, increasing from $14.41 in 1996 to $76.52 in 2004, and has dropped only twice in the past 35 years. Many employees call it the "stock appreciation" program, as if unaware that the stock price could do anything but go up.
That can be dangerous considering that some employees, such as Mr. Till, have a large proportion of their savings in company stock. Anson officials say they recognize the problem, but say that it's up to employees how much to invest.
"We're not out there touting the company," says Mr. Andrzejewski. "We give the historical results, and it's up to them to figure out how much to invest and how much they need to diversify."
Anson also offers all employees cash bonuses, and a profit-sharing plan where investment options are broad-based stock and bond funds, not company stock.
Mr. Andrzejewski also says that with so many employees heavily invested in the company, management doesn't make big, risky bets. Orders from junior employees to buy large amounts of stock, he says, make him and the other managers careful to look after that money.
For Mr. Andrzejewski, the shareholders are not anonymous far-flung investors and mutual funds, but the people he passes in the halls, talks to in meetings and in some cases has known and worked with for decades.
More Stability
Mark Reilly, partner at 3C Compensation Consulting Consortium, in Chicago, says the way Anson's compensation plan is structured does tend to lead to more stable management. In a highly troubled company like Enron, "the vast majority of the stock awarded was really options," he says. "So there was an incentive to gamble, to make sure the options paid off. It's different with this type of organization because it's really your own money. It's a different type of behavior than with people that have stock options."
Nevertheless, no company is completely immune from downturns. That's why although nearly all the employees participate in the program, there's also the occasional holdout. Dick Liebold, a 78-year-old operations manager in the Los Angeles office, has been with the company since 1968, and in all those years he's never bought a single share of Anson stock.
"People look at me and they think, 'What's wrong with him?' They can't understand why I don't invest." He says he's just about old enough to remember his father losing his job in the Great Depression, and remains risk-averse. In more recent times he has seen friends and neighbors lose big money in the bursting of the NASDAQ bubble.
He still benefits from the company's success through its profit-sharing plan. But although he believes in Anson, he doesn't think the risks of stock ownership are worth it. "Everything is going fine, but I take nothing for granted," he says. "We've had an excellent year this year, last year, the year before. Will it continue? I have no idea
--Mr. Blackman is a staff reporter for The Wall Street Journal in South Brunswick, N.J.
Reprinted by permission of [the Wall Street Journal], Copyright © (2005) Dow Jones & Company, Inc. All Rights Reserved Worldwide. License number (1206031254698). Dow Jones & Company's permission to reproduce this article does not constitute or imply that Dow Jones sponsors or endorses any product, service, company, organization, security or specific investment.
Benefits
You will have a chance to own a part of the company, through employee ownership. In addition, we have a generous bonus program, and profit sharing.
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