SDC Attracts Entrepreneurs Using Stock Ownership Program
San Diego, CA, February 16, 2012 - In 2007, the SDC management implemented a change to the company structure from a LLC to employee ownership. SDC's management believes we can grow the company faster and create an atmosphere of greater company loyalty with employee ownership. All employees are eligible for employee ownership.
Employees earn stock options by contributing to new business to the company, and then earning a profit on the contracts. The plan encourages everyone to participate in business development in one form or another, including identifying and qualifying SDC for new customers, pre-proposal marketing, proposal preparation, and ensuring a satisfied customer once the contract is awarded.
There are three important aspects of the program that make it real for employees: 1) transparency, 2) stock buy-back by the company, and 3) a four year vesting period for the options. Each quarter SDC management publishes a letter with the new stock price as well as a description of the factors that changed the price up or down. All of this information, including the stock price formula calculation, are included in the letter. Also, each quarter, a percentage of the profit earned by the company is set aside to purchase stock from employee owners. While most employee owners go for the long term investment, some employees may elect to sell stock to spread risk. Also, we have a relatively short vesting period. We want our employees to participate in the program, to engage in the process, and to commit to SDC.
The stock price history is shown below and reflects a strong history of growth since 2007. Currently, there are 11 employee owners, which will likely increase during the next quarter to as many as 17. The stock price is driven by profit and growth. One of the best ways for SDC to continue to grow to the benefit of its employee owners is to attract other entrepreneurs who can expand SDC's customer and service base. If you are interested in hearing more about our employee ownership program, please don't hesitate to contact any of our employee owners about their experience.