Tuesday
Tips/AdviceJohn Robert Beyster on Employee Ownership
John Robert Beyster: the man behind Employee Ownership
When the name John Robert Beyster is mentioned, most people don’t know who he is. In fact, I didn’t know who he was until I started researching this article. It seems that this man, singlehandedly, invented the employee ownership system.
He is the founder of Science Applications International Corporation. By giving his employees some stake of ownership in the company, he got the most talented individuals to stay and help build the company into a Fortune 500 enterprise.
He recently wrote an interesting piece in XConomy.com, and shared some insights into what makes employee ownership work.
Here’s how he realized that he needed employee ownership:
I soon realized that to attract talented employees—and keep them—I would need to offer them real ownership in the business by allocating some of the stock I held.
The prospect of owning and running a piece of the business attracted many extremely talented men and women to the company, and we were able to grow SAIC from nothing in 1969 to about $6 billion of annual revenues by 2004.
Some advice on how much the owner has to keep in order to maintain control over the company:
So my advice to founders is to hold on to 8 to 10 percent of their company’s stock for as long as they possibly can. This will allow them to use a large portion of the remaining stock to incentivize their employees while at the same time retaining a sufficient balance for themselves to maintain firm control over the company’s direction. This will also make their negotiating position at retirement stronger than what I personally experienced.
Here is the full article, you’re going to have to read it in order to get inside the head of this great man.
Post Tags: Business, Company, Employee ownership, Fortune 500, John Robert Beyster, Ownership, Science Applications International Corporation, Stock
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