New Corporate Status Could Protect Company from Outside Buyers
by Karen Kahn
“Making business decisions that give weight to both profit and social impact has made us a more successful company because it has made us a more meaningful organization to our customers, vendors, employees and community,” says Dave Stiller, CEO of Heritage Aviation.
Heritage Aviation isn’t the kind of company people typically think of when identifying companies that prioritize social impact. Heritage is a fixed-base operator at the Burlington [VT] International Airport, providing aircraft inspection and maintenance, a pilot lounge, and heated hangars. With over 60 employees, it’s a good-sized operation that has grown rapidly over the past several years. That growth, says Stiller, has been fueled by several decisions, including becoming 100 percent employee owned.
Commitment to People and the Environment
Stiller’s father, Bob, bought Heritage Aviation in the early 2000s. Bob Stiller founded Green Mountain Coffee Roastersand built it into one of the country’s most successful gourmet coffee brands, with a commitment to corporate social responsibility, sustainability, and fair trade.
That family commitment has driven decision making at Heritage as well. When after ten years, Bob Stiller wanted to sell Heritage Aviation, he decided to sell to his employees. He brought in his son, Dave, who had a deep interest in employee engagement, to help manage the transition. Dave, now president of the corporation, spoke to Fifty by Fifty about the transition to an Employee Stock Ownership Plan (ESOP) and the decision to become a benefit corporation.
“There is a way of doing good in the world that can drive profitability.” — Dave Stiller, CEO of Heritage Aviation
“We implemented open-book management,” said Stiller, and then “over two years transitioned to 100 percent employee ownership. As a result, we’ve made huge strides. The business and the employees have really flourished.”
The Stillers chose employee ownership because of their commitment to the people who make Heritage Aviation a success. In addition to employee ownership, the company offers good benefits, including a 401K retirement plan, health benefits, and profit sharing. The open-book management allows people to see how their work contributes to the bottom line, says Stiller, and they know that the better the company does, the greater the year-end bonus. This year, says Stiller, “management offered the largest allowable bonus, with every worker receiving an additional 18 percent on their yearly earnings.”
To ensure the ESOP is more than a retirement plan, employee owners inform company decision making, through a committee on worker and customer safety and an employee ownership committee that weighs in on company policies and direction.
Becoming a Benefit Corporation
Environmental commitment has been important to Heritage Aviation from the start. The company has made important strides toward reducing its carbon footprint, including operating a LEED-certified Gold building with a green roof and installing a wind turbine and solar panels to produce renewable energy.
It was in the context of its dual commitment to its employees and sustainability that the board began to consider becoming a benefit corporation.
It was in the context of its dual commitment to its employees and sustainability that the board began to consider becoming a benefit corporation, which provides a legal structure for considering multiple stakeholders: shareholders, workers, the environment, and the community. After discussing this opportunity with the ESOP trustee and the employee owners, the company took the B Lab certification survey to measure its current social and environmental impact. They found that even without making any changes, they scored high enough to meet the qualifications of a benefit corporation.
The results of the B Lab survey made the decision easy, says Stiller, “but the conversion to a benefit corporation is not only about what we have done, it’s also about directing our path forward.”
As an employee-owned benefit corporation, Heritage is trying out some new programs to support its workers, grow its business, and improve its sustainability.
Recently, Stiller says, they have implemented an apprenticeship program for aviation technicians. Facing a national shortage of trained technicians, Heritage set about building the workforce it needs to grow. The program also provides an employee career path, by offering apprenticeships — which offer an immediate upgrade in pay — to frontline workers in unskilled positions. Certification opens up a career in a high-demand occupation with real earning capacity.
To improve sustainability outcomes, the company launched Heritage Green, a program that allows aviation customers to offset their carbon emissions from jet fuel purchases. In partnership with NativeEnergy, proceeds from a 10-cent surcharge on each gallon of fuel go to fund the Honduras Clean Water Project, which provides water filtration systems to families in coffee-growing regions of Honduras.
“More than 600,000 people in Honduras lack access to clean water,” according to John Ringer, client strategy manager at NativeEnergy, a Vermont-based company that helps organizations address global sustainability. Ringer explained that the filtration systems have a multiplier effect because, when families use them, they don’t have to cut fire wood to boil water. “Cutting and burning wood from unsustainable sources . . . has lasting and detrimental impact on the environment and global climate,” says Ringer.
Maintaining a Legacy
Stiller is proud of the ESOP and how it has strengthened Heritage as a business. The company’s commitment to providing a great workplace has been recognized with Vermont Business Magazine’s award as one of the state’s Best Places to Work. In 2018, they also made B Lab’s Best for the World list.
To Stiller, the ESOP and benefit corporation work together — businesses don’t need to trade profitability for social impact. Rather, he says, “There is a way of doing good in the world that can drive profitability.” In the long run, says Stiller, he thinks being a benefit corporation objectively demonstrates the company’s impact on the world in such a way that is relevant to acquisition offers. “If someone wants to buy the company, the board needs to act in the best interest of the ESOP, as the shareholder, including considering whether the ESOP’s best interests would be to remain independent. The Benefit Corporation law requires that we consider more factors than just the sale price in exercising our board duties.”
Karen Kahn provides communications consulting and editorial support for Fifty by Fifty.
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