🔒Consigli’s people: Continuing a 121-year legacy at Central Mass.’ largest employee-owned company

Almost 10 years ago, Anthony and Matthew Consigli were seriously contemplating the future of Consigli Building Group, the Milford-based construction company started by their great-grandfather.

The company, founded in 1905 by Peter Consigli, was in its fourth generation of leadership. CEO Anthony and President Matthew were trying to determine how to best position Consigli for its future while still retaining its legacy as a family-owned company. Transitioning from private family ownership to employee ownership seemed like a natural fit, because it was a reflection of the strong, cohesive culture the company had worked hard to create over the years. By January 2018, Consigli was 100% under an employee stock ownership plan. The ESOP is a “key part of our long-term succession planning that allows Consigli to not just maintain the company’s legacy, culture, and future, but also keep building on it,” said Jeff Navin, Consigli executive vice president. “It ensures the future of our reputation, the future of our brand, and it ensures that our company will continue into the next generation,” said Navin. Consigli is the largest employee-owned company in Central Massachusetts, with 825 local employees and 2,500 worldwide, according to data provided to the WBJ Research Department.

How ESOPs work

An ESOP is a benefit plan where a company sets up a trust fund and contributes new shares of its own stock or cash to buy existing shares, according to the National Center for Employee Ownership. In 1975, only a handful of U.S. companies were employee-owned, but 2023 saw 6,525 employee-owned businesses in the country, according to U.S. Department of Labor data released in February. ESOP plans in 2023 covered more than 15 million participants and held estimated assets of $2 trillion. About 29% of U.S. ESOPs are in service sectors, 20% are in manufacturing, 16% are in construction, and 13% are in insurance, real estate and finance. Massachusetts is home to 137 ESOP companies, with 38,085 combined employee owners. In an ESOP, shares in the company’s trust are sent to individual employee accounts, according to NCEO. Generally, all full-time employees aged 21 or older participate. Employees become more vested in the company as they gain seniority, meaning over time, they gain more access to the shares in their account. When a worker leaves a private company, the employer buys back the employee's shares at fair market value, determined by a third-party annual valuation. They must be 100% vested within three to six years. In an ESOP, profits that a company would normally use to grow and invest in capital expenditures are shared with employees, said Nancy Wiefek, NCEO research director. For S corporations, the percentage of ownership through an ESOP is not subject to federal income tax. Companies can use the money they would have paid in taxes to invest back into the business, she said. Sometimes companies will quickly move toward 100% ESOP, but a lot of times it’s a gradual move, Wiefek said. Roughly two-thirds of all ESOPs are 100% employee-owned, she said. “It’s a pretty big decision for a family to go to a 100% ESOP. It’s a really big deal, and has a lot of benefits for the community,” Wiefek said. “They could have gone a route that was much more lucrative by selling to private equity.”

Consigli’s commitment

The ESOP is a way for Consigli to demonstrate its commitment to the community, Navin said. “With an ESOP, we are able to demonstrate just how deeply rooted our commitment to and investment in our employees is, as well as equip both current and future employees with the tools and resources they need to succeed,” he said. The ESOP has been a great tool for recruiting and retaining employees, Navin said. Candidates tell the company they’re drawn to the idea of joining a business where employees have an actual stake in success. “In a competitive industry like construction, employee ownership has proved to be a meaningful differentiator because it is more than just a benefit or perk that we offer. It’s a long-term commitment,” Navin said. “When you are an employee-owner of Consigli, you are building more than just projects. You are also helping build our future. That’s a really special feeling.” Laura Finaldi is a correspondent for Worcester Business Journal.