Paula Teacher has always been employee-oriented.
She took the sentiment to the next level in December when she sold her company, Paula Teacher and Associates Inc., to her employees, successfully creating an Employee Stock Ownership Plan.
“Moving into an ESOP made 100% sense to me,” Teacher said.
Teacher founded her business in 1986, and it was later incorporated in 1991.
Paula Teacher and Associates Inc., headquartered in Penn Hills, works with children, adolescents and adults with special needs to provide services and support that suit their specific situations.
The company works in partnership with base service units, managed care organizations and county, state and federal government offices to bring services to homes, alternate living arrangements, schools and workplaces throughout Southwestern Pennsylvania.
Services include developmental programs to specialized therapies, from socialization through vocational training and job counseling.
According to Kerri Acierno, president and chief financial officer, the company assists clients mainly in Westmoreland and Allegheny counties, as well as some clients in Bedford, Somerset, Fayette, Butler and Washington counties.
Teacher decided in the late 2010s she was ready to retire. Worried about what selling the company to a new owner would mean for her employees, she began looking into an ESOP.
“It was a lot of learning initially,” Teacher said.
Acierno said they went to Dan Zugell of Business Transition Advisors in April of 2020 to evaluate how much the company would be worth if Teacher were to sell it. The employees of the company decided they would start a trust and slowly put money in until they could purchase the company from Teacher for that declared price. Initially planning to buy 51% of company shares, as of Dec. 31, the ESOP Trust was able to buy 100% of the shares to become completely employee-owned.
While Teacher remains affiliated with the company as a board member, it’s officially run by a management team consisting of Acierno, Dianna Hubsch, Linda Crawford and Jenny Scheer. The team was created with the ESOP so there could be a more formal command chain. Hubsch said they’ve all worked together for years and fell into the role easily.
“We found so far in this process that the ESOP community is super helpful,” Acierno said.
According to a news release from the company, Paula Teacher and Associates Inc. is one of more than 300 companies in Pennsylvania are either partially or fully employee-owned. The goal of an ESOP, Acierno said, is to help close the wealth gap and bring employees up to a better standard of living.
“ESOPs really do great things,” Acierno said.
Hubsch said there are ESOP conferences held to help build and educate the community about the practice. She said hearing someone’s testimonial is always inspiring.
“It’s electric,” said Hubsch, the company’s administration officer. “You leave these conferences really revived and energetic.”
Hubsch said the transition into the ESOP philosophy was easy. The process itself was complicated and required a lot of education for the employees, Hubsch said.
“I’ve been with Paula for over 35 years,” Hubsch said. “Her vision and the way the company was operated was always very employee-focused.”
According to Scheer, most of the day-to-day operations during the transition was trying to get employees into the mindset that their efforts directly affect the company.
“We’re trying to teach people to understand how their behavior and their decisions affect the bottom line, and that all affects us,” Scheer said.
Paula Teacher and Associates Inc. has about 100 employees who work in the field and are part of the ESOP Trust, but in different amounts depending on how long they’ve worked at the company.
“A lot of the employees here are long-term employees,” said Crawford, the company’s HR generalist.
Acierno said employees becoming members of the trust is like a 401(k). They have to work a certain amount of days or months to become an eligible trust member.
“The difference between a 401(k) and the ESOP is people don’t put any of their own money into it,” Acierno said. “It’s all the company putting contributions in for them.”
To become fully vested, a person must be in the trust for at least six years. Each year worked is worth 20% of vestment in the trust.
Since beginning the ESOP, the new Paula Teacher and Associates Inc. motto is “our company, our future.”