A Bold Path to an Inclusive, Thriving Economy: Employee Ownership

Enter Apis & Heritage Capital Partners, a social impact private equity firm founded on Juneteenth of 2021 that works with businesses with significant workforces of color so that founders can receive a fair return on their life’s work while their companies become 100% employee-owned under A&H’s stewardship. Stevens’ business fit A&H’s criteria, in part because some 98 percent of the workers are Hispanic.

“Helping vital small businesses with a significant percentage of Black and Brown workers transition to employee-ownership is an effective and exciting way to address the racial wealth gap—and closing that gap boosts our economy across the board,” said Maria Kozloski, Senior Vice President of Innovative Finance at The Rockefeller Foundation.

“Research shows employee-owned companies tend to be more productive and profitable, while workers retire with significantly more savings. A&H is engaged in exactly the kind of visionary work we want to support.”

Workers of color as a group are particularly hard hit in retirement. About 47 percent of all adults aged 55-66 have no retirement savings, according to the U.S. Census Bureau. Dig deeper, and an even more troubling picture emerges: while 57 percent of White families held retirement assets, only 35 percent of Black families and 26 percent of Latinx families have retirement account savings, according to the Federal Reserve System’s Survey of Consumer Finances.

And even Black and Latinx households that do have savings have less to put away towards their retirement. The median retirement savings for a White household between ages 25 and 61 is $79,500. For Asian-Americans, it is $67,025. Black and Latinx households have $29,200 and $23,000, respectively.

“Employee ownership is an incredibly powerful tool for employee retention,” Brownrigg notes, “because every year, employees see their accounts growing twenty times more than the average 401(k). And this is without any financial contribution on their part; they earn the shares by staying with the company and helping it to thrive.”

This work, considered globally, also supports the U.N. Sustainable Development Goals 8 and 10, referring to decent work and economic growth, and reduced inequalities.

“What will happen with these companies?” Reeves asks. “We want to see the employees become the owners. We exist to make that process a lot simpler. But we hope for the existence of more funds to do this work. We want to build this sector. Our aspiration is to engender copycats.”

At Accent Landscape Contractors, Inc., Stevens agreed to stay on for one year and support the transition, and that stability has increased employee confidence.

The two employees he told first about his retirement were Joe L. Aguilar, Jr., the new CEO, and Elida V. Franco, the new CFO – and some tears were shed. Aguilar has been working for Accent for 32 years, after Stevens lured him away from a sprinkler supplier. Franco started doing books for Stevens 35 years ago, when she was a 22-year-old in college.

“I met one of my co-workers, Veronica, when she was a little girl carried on the shoulders of her father, who also worked for Cameron,” Franco says. “Now she’s been working with us for almost 15 years. We’ve seen our children grow, and our grandchildren appear. We are family. It’s hard to let go. But I know Cameron would never let us go somewhere where we wouldn’t be successful.”

Aguilar agrees with that assessment. “I always felt good about Cameron, from the first day he hired me,” he says. “So even if I don’t fully understand this, I trust it. I also do know our employees pretty much live on their salaries, without much saving for retirement. I think employee ownership has promise to have a big positive impact on peoples’ lives.”

And that, Leverette says, is the point. “I’m doing what my mom and my dad and Morehouse told me to do,” he says, “Now we want to activate other finance professionals to pick up this mantle. There should be 20 firms—even more—out there doing this work.”