Every October, Sundt and other ESOP companies across the nation celebrate Employee Ownership Month. To educate people on what employee-ownership means, we spoke with a couple of ESOP rock stars: longtime Sundt employee-owners Marty and Eric Hedlund. Each has worked for Sundt at every level of the business, starting in field and project engineer positions to now serving in major leadership roles with Sundt’s Building Group. Here’s what they had to say.
You’ve both been with the company a long time, in leaner seasons as well as times of great success. In your experience, what makes Sundt different as a general contractor?
Eric: Being a 100% employee-owned company really attracts some incredible, caring people who go the extra mile. Also, there are lots of builders in this industry who are, essentially, general contractors who happen to be in business—we’re a business that happens to be in general contracting. In other words, we make decisions based on the business realities that we face. And that’s very healthy as an organization.
Marty: I’d echo what Eric said, and I’d add that employee-ownership goes through all levels of this company, all the way to our craft professionals on the front lines. You get a different feeling from the people who build our work; they’re taking part in the ownership of the company, and they’re just as vested in the company’s success as the people at the corporate office.
Couples Eric and Julie (Packers fans in middle) and Ellen (Bears fan left) and Marty Hedlund (Cardinals fan right) standing at field level of AT&T Stadium for a Cowboys v. Packers game in 2017
For you guys individually, how has Sundt’s Employee Stock Ownership Plan (ESOP) benefited you since starting here, and how has it set you up for success in the future?
Marty: Back when I first started with Sundt, Wilson Sundt was the CEO and Bob Sundt was the president. We were in a transition from family ownership to employee ownership. A good chunk of the company was owned by the employees in 1984, but nowhere near all of it. Bob and Wilson were great leaders, and they upheld values that are still core to the business today. But with the transition to Doug Pruitt as president and eventually CEO in the ’90s, some key changes were made including the shift to 100% employee ownership, and the stock price improved. The growth in share price and overall equity of the company has been remarkable. It’s something I feel fortunate to have been a part of. Now, being here going on 36 years, the personal wealth it’s created for my family and Eric’s has been an uncommon blessing.
Eric: All our other siblings, by coincidence, are teachers and contributed to the state retirement system. While their retirement is generous, it’s quite different from the opportunities provided by the ESOP. The ESOP gave us a whole different ability to create wealth for ourselves and for future generations, which we wouldn’t have had otherwise.
To people considering becoming an employee-owner with Sundt, or to contractors considering shifting to an ESOP model, what advice would you give them?
Marty: I’d tell them what I’ve told many folks I’ve recruited or done business with over the years: with 100% employee-ownership, not only do people become both mentally and physically vested, but there’s a different feel with our company. It’s like a family. I went to work on a Sundt project early in my career, and within the first few days of working in the jobsite trailer with that team, I said to myself, “I will retire from Sundt.” I just felt this kinship between these people who’d been on jobs together in Page, or Denver or Douglas. They had this real camaraderie. We’re bigger as a company now, but that spirit and environment is still here.
Eric: You know, coming up through the ranks, there were lots of good people who mentored Marty and me, and we’re now in the position where we have the chance to pay it back. We want people to understand the value of the ESOP. At the end of the day, we’re business partners. All of us.
Parting thoughts? Anything you’d like people to take away from this month?
Eric: It’s important to remember: the real wealth from the ESOP comes from the increase in share price over time. The other side of that equation is that, at 55, you can diversify. When you get towards retirement, you want your personal portfolio to be more conservative and varied. Sundt has really set up its people to transition into retirement successfully, and with a lot of knowledge and financial wherewithal for the future.
Marty: Sometimes it’s hard; when you start out and you’re just a few years into the business, head-down just working away, and you look up and think: “What has this ESOP thing done for me? Will it really be worth it in the long run?” And the answer is yes, it absolutely will. When you get over the hump, the ESOP really does become that wealth creator that opens up a lot of freedom for your future. So, I’d say: stick with it. It might be fashionable today for people to stay mobile and hop from place to place. That 401k they take with them might be okay, but it probably won’t out-perform an ESOP.
Eric: Marty’s right. It’s like the example of the carpenter who goes down the street for a buck more—that’s exactly what you’re going to get. But you’re not going to build the kind of wealth that you can as an employee-owner.