RAND shareholders (from left) Peter Varsalona, Christopher Walsh, Stephen Varone, Michael Larkin, and Peter Scallion celebrate the company’s new Equity Stock Purchase Plan.
Last Thursday night RAND employees, along with their family and friends, gathered at RAND’s office in Chelsea to celebrate becoming proud owners of the company—the first time since RAND’s founding in 1987 that shares of the company have been offered to the staff at large.
Shares in RAND’s Equity Stock Purchase Plan, which are privately held and are not traded on a public exchange, are funded by the company’s profit sharing plan and offered for purchase to employees who have been with the company for at least three years. Employees who have been with the company for 10 years or more also have the opportunity to buy up to $15,000 in matching shares.
RAND’s stock plan was a long-time goal for RAND’s President Stephen Varone, AIA. Until recently, New York State law prohibited non-licensed persons from being owners in a Professional Corporation. This put New York design firms at a competitive disadvantage with firms from neighboring states, which permitted varying degrees of non-licensed ownership, meaning that top performers in areas such as finance and marketing could be enticed to leave their New York firms, where ownership was not possible.
After a long lobbying effort spearheaded by the New York State AIA, in 2013 the law was revised and a new type of corporate structure, a Design Professional Corporation, was established in New York to allow non-licensed Professional Corporation staff to own up to 24.9% of the firm. RAND subsequently changed its corporate designation from PC to DPC to take advantage of this opportunity, paving the way for licensed and non-licensed staff alike to purchase shares in the company. The response, we’re happy to report, has been overwhelming.
“We’re very excited to offer employees this opportunity to become owners of RAND and give them a stake in the growth and direction of the firm,” said Varone. “The enthusiasm of the new shareholders is extremely encouraging, and we’re looking forward to welcoming new shareholders on board every year.”
“Owning shares in RAND makes me feel even more invested in the company,” said Senior Engineer Jamey Ehrman, PE. “It’s a real incentive for us to keep going that extra mile for RAND and our clients.”
A total of 29 employees are now official owners of RAND, and approximately $150,000 in capital was raised with the initial stock offering. RAND’s capitalization has grown 480% since 2003, giving it an estimated valuation of approximately $6 million.
“Becoming an employee-owned company ensures that RAND remains internally managed, which helps secure our long-term stability,” said RAND Principal and Vice President Peter Varsalona, PE. “With a motivated staff of inspired shareholders, RAND’s future looks more promising than ever.”
