Case Studies

Merrick & Company

Even in an ESOP, oversight pays dividends

Employee stock ownership plans (ESOPs) have gained popularity in the last 20 years, in part because favorable tax regulations have made them an excellent way for retiring leaders to set up succession plans that reward their team, and because by passing profits and losses to ESOP trusts, which serve as shareholders, certain corporations can avoid paying federal income tax on those dollars.

Then there are a few, rare cases where a company has employee ownership in its very DNA.

“I would argue employee ownership is a foundational element of our culture and our behavior,” says Chris Sherry, president of Merrick & Company, an engineering firm that provides many services in a range of verticals.

Merrick & Company

Sherry would know, being perhaps one of the clearest examples of the positive things that can happen when firms opt for employee ownership. He has been with Merrick since 1985, and in the two-plus decades since, both his career has evolved with the company.

Hiring on all cylinders

Merrick got its start in 1955 as a surveying and civil engineering firm headquartered in Greenwood Village, Colorado. Sixty-two years later, it has diversified to offer engineering services to six markets: infrastructure, energy, life sciences, high-performance facilities, nuclear services and what it calls “geomatics,” or surveying and mapping.

It does everything from public works land development to drone-enabled GIS mapping and design of containment equipment for the National Nuclear Security Administration and high-performance buildings for the Department of Defense.

“We call ourselves a six cylinder engine,” Sherry likes to joke.

The company has diversified geographically, too, expanding into 18 offices spread throughout Colorado, Texas, Georgia, North Carolina, South Carolina, Tennessee, Florida, New Mexico, Canada and Mexico. And though always employee-owned, in 1983, the company adopted the ESOP model.

Sherry attributes that growth to employee owners who, in the early ‘90s, made an effort to diversify in order to help Merrick weather tough economies. And it is employee owners who continue to push the company forward.

“It’s in our DNA to grow,” Sherry says. “We all understand the myriad of benefits behind growing. It provides opportunities for everybody in the company.”

With great power, great responsibility

Because of Merrick’s employee ownership, Sherry says there is a high level of both accountability and freedom.

“It’s just the whole notion of kind of working for yourself,” he says.

He recalls how once, while working as a project manager, he FedExed drawings to a client. When he told his team the next day, a designer raised his hand and admonished Sherry for paying extra to have the documents shipped overnight when they weren’t due for several days.

“It was the best comment ever,” Sherry said. “He was just a production-level designer, but he’s an owner and he made a great point.”

Merrick & Company

That kind of accountability is pervasive, but so is the flexibility.

In another instance, when Sherry was a young project manager, Merrick was contacted for a potential job by Keystone Resort, one of Colorado’s best-known ski resorts. Sherry put together a proposal, but Keystone’s team countered that the fees were a little too high.

Sherry pushed, saying that Merrick really wanted the project, so Keystone’s representative offered a deal: he’d pay half in cash and half in lift tickets. Sherry agreed, signed the deal and brought it to his boss, who responded, “Can we make payroll with lift tickets?”

Then the boss offered $50 for four of the tickets. It was in that exchange that Sherry both realized how much freedom he had as an employee owner and learned the value of cash.

A winding path to president

Employee ownership allows for career opportunities, too, and Sherry is a prime example.

He joined Merrick in 1985 as a structural engineer and moved through various roles including assistant project manager, project manager, business unit leader, corporate support, business development and chief operating officer. Merrick sent Sherry to school to earn his MBA, and, in April 2017, he assumed the role of president.

Those weren’t roles Sherry necessarily sought, but rather roles that Merrick’s leadership selected him for.

“I just got tapped on the shoulder,” he says. “It’s kind of funny. When I was in operations and I got pulled into corporate support, I was like, ‘Man, who did I piss off? Why am I being punished?’ But now in retrospect, it was all by design, and it was the best education I could have gotten.”

Grooming the next generation

Now, as president, Sherry can see that his career was shaped by fellow employee owners who wanted to ensure the company would have the kind of talent that could carry it long into the future.

As president, Sherry now works to ensure that Merrick’s younger employee owners have similar pathways. Merrick spends a considerable amount of time on organizational development, making sure it has young folks identified for leadership, and that they’re learning the many ropes, he says.

Merrick & Company

The company offers professional development through its Merrick Learning Institute, which offers a “mini-Merrick MBA,” as well as business development, supervisor and leadership training tracks. It offers more technical training, because engineering is, after all, its “bread and butter,” and it makes sure that its six divisions cross-pollinate ideas and talent.

Success is a delicate balance of hiring the right people, instilling the value of the company’s unique employee-owned culture and offering the right training and opportunities, Sherry says.

“That’s one thing about employee ownership,” he says. “You always have to roll up your sleeves and work at it.”

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