It’s the ultimate bonus: Georgia Theatre Company (GTC), the 18th-largest theater circuit in North America, has rewarded the diligence and dedication of its roughly 700 employees by making them the owners of the company. This apparently unprecedented action by a movie-exhibition chain is made possible by the creation of an employee stock ownership plan (ESOP), a process under which eligible workers become stockholders, at no cost to them, while the management structure remains intact.

GTC president Bo Chambliss reveals that company founder and chairman William J. Stembler is “getting to the point where he has been trying to retire and really wants to take a step back. So he had a number of options. You could sell the company, bring in private equity, or try to take it public, and the fourth option was converting to an ESOP.”

“This is something that construction companies and entities that really don’t have a whole lot of assets do—they’re about as good as their next five years of contracts,” says Stembler. “We’re a little different breed, but it sure does look like it was a good solution for my family, and also a nice, rewarding thing to do to give the employees a chance to participate in all this fun that I’ve had.”

“The benefit of an ESOP,” Chambliss says, “is that you get to keep your current management team in place and you get to keep all of your employees in place. From an employee standpoint, it’s seamless—they don’t even know that it’s happening immediately. And the benefit to Bill and his family is they get paid the value of the company. Bill is a very, very loyal person—he has always taken care of his employees. Selling out to one of the big three or four or bringing in a private equity [firm] he knew was not the best thing for his employees. So when the idea of an ESOP was brought up, he thought it was a fantastic idea, and assuming the money was around the same, he was all in.”

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