For the week of January 16 - 22, 2002

Webb Landscape 
enters new era

Trust established for eventual 
employee ownership

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By GREG STAHL
Express Staff Writer

In 30 years, Doug Webb transformed his Ketchum-based landscaping business from a one-man, one-pickup truck and one-lawnmower operation to the largest landscaping company in the Northwest.

Doug Webb founded Webb Landscape, Inc., the largest landcaping company in the Northwest, 30 years ago. Now he’s prepared to give up ownership of the company he built to sell it to his employees. Express photo by David Seelig

And culminating his years as owner, he sold the business last month to his employees and assumed a new role as the company’s chief executive officer.

"I feel so good about it, it’s ridiculous," he said.

Webb issued a memo Dec. 18 to Webb Landscape employees regarding the sale.

"Today was a momentous day in the 30-year history of Webb Landscape, Inc. A group of senior officers from the company…met with our attorney, accountant and financial advisor to sign papers that transfer the ownership of the company from Juli (Webb) and myself to an employee stock ownership plan and trust (ESOP) for the benefit of Webb’s eligible employees," he wrote.

"Though ESOPs can be constructed in various ways, they are one form of retirement plan, as made possible by Congress under retirement law," said Management Consultant Jima Rice, who worked with Webb on the ESOP conversion.

In an ESOP, a company sets up a trust, and the trust holds all the shares of the business. The business buys the shares from the trust over time and allocates the shares to employees’ accounts.

When an employee retires, or resigns when fully vested in the company, the employee sells the shares back to the trust.

Most ESOP companies, including Webb Landscape, have the desire to set up an employee benefit or incentive as one reason for starting the plan.

Some companies hope that by making employees owners they will increase their dedication to the firm, improve work effort, reduce turnover and generally bring a more harmonious atmosphere to the company.

Research has shown, according to an ESOP information Website, that giving workers a significant stake in their companies can improve their attitudes towards their companies, and that these improved attitudes can translate into bottom line improvements.

A 1993 ESOP Association study found that 54 percent of member companies cite an overall productivity increase due to their ESOP. Webb believes that will be the case with his company.

And "the neat thing," Webb said, "is that Webb Landscape is no longer (federally) taxable" under the ESOP.

These tax savings, theoretically, supply the money that gives the trust—and employee ownership—added value.

"Employees will see a return on their own work investments in the company," Rice said.

Webb summarized: "You’re taking money that would normally go to the IRS, and in essence, you’re giving it to the employees (through ownership)."

Shares in the trust are allocated to employee accounts, and all employees over 18, who work more than 1,000 hours in a year, participate in the plan. Allocations, in Webb’s case, are made on a formula of relative pay.

Almost unknown until 1974, about 11,000 companies nationwide use ESOP plans, covering more than 8.5 million employees. The one at Webb Landscape, however, is the first and only ESOP in the Wood River Valley.

"I have sold the business to my employees, all employees who have worked more than 1,000 hours," Webb said.

"Here’s the thing: Doug Webb’s not going to live for ever, and his wife’s not going to live for ever. This puts it in the hands of people who work here and care about it."

Since he started mowing lawns in 1972, Webb Landscape has grown to more than 170 employees at peak season, comprising more than 30 work crews.

The business was significantly expanded in 1980 with the addition of the Bellevue Nursery, located on Glendale Road, two miles south of Bellevue. A mere 8 acres in the beginning, the nursery now encompasses more than 30 acres of trees, shrubs and perennials, as well as three greenhouses and an extensive stock of stone and pavers.

Production of aspen trees began in 1981 with approximately 500 trees grown the first year. Presently, aspen production averages more than 200,000 seedlings annually, grown from locally harvested seed.

In 1982, Webb Landscape introduced concrete pavers and hydrapressed slabs to the area, setting a new trend in driveway, walkway and patio surfaces.

A new building to accommodate offices, a shop and garden center was built in 1990 in downtown Ketchum. This continues to be Webb Landscape’s central location, though expansion was required in 1998 to meet demands for additional space.

Construction of a new 10,000 square foot building at the Bellevue location was completed in the spring of 1998, providing much needed space for offices, storage, conference room and a greatly enlarged garden center.

"Quality, commitment, attention to detail and foremost, service, are the characteristics that have made Webb Landscape what it is today," states a company description. "And Webb continues to grow, introducing innovative equipment, machinery, products and techniques with the goal of providing the best products and services available anywhere."

Though he no longer is the company’s owner, Webb is still very involved in the company’s decision making hierarchy.

As president of a board of directors for Webb Landscape, Webb maintains his involvement. In addition to the board of directors, however, is a board of trustees, who make decisions about the trust and the company’s fiduciary responsibilities.

Both boards are comprised of long-term Webb employees.

"I had to give up control to make it work," Webb said. "Still, I am CEO, but I am elected to that position, and I can be fired."

Nonetheless, the move to employee ownership—even contemplation of it—appears to be affecting Webb’s business positively, he said. September, October, November and December were all record months for the company.

"We’re doing better because we are one. It’s showing already," Webb said.

"This sale is tremendously exciting for me, for my family and for Webb. The business has grown over the years through the inspired work and dedication of all Webb employees," Webb continued in the employee memo. "It has a bright, long-term future ahead of it. I can think of nothing more satisfying than passing ownership to those who have made the business a great success."

 

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