Lending Solutions Inc. said it has established a new employee stock ownership plan.
The Elgin, Ill-based provider of lending center services and consulting programs for financial institutions said the plan transfers 30% ownership to the employees of LSI through a defined contribution benefit plan and was formally introduced to employees on Jan. 11.
“Transitioning to an ESOP model gives us the opportunity to reward many of our long-term employees for their commitment and hard work over the years, as well as attract new employees,” said Mark Johnson, chairman and principal stockholder of LSI.
LSI’s ESOP will be administered by the company ESOP committee, working in conjunction with a third-party trustee and a third-party administrator, the firm said. LSI said it engaged the services of Innovative Shareholder Strategies throughout the development and introduction of the ESOP.
“We’re tremendously proud of what we’ve achieved over the past several years at LSI,” said Lee Kolquist, LSI CEO. “Our employees have always taken great pride and ownership in their work, and now, with the ESOP, eligible employees will have the opportunity to earn a tangible stake in the company to validate that ownership.”
According to the National Center for Employee Ownership, there are approximately 11,500 ESOPs in the U.S. covering nearly 14 million participants, LSI said. The NCEO said companies with ESOPs grow 2.3% to 2.4% faster than comparable non-ESOP companies as measured by sales, employment and productivity growth, according to LSI.
“An ESOP is a complicated transaction with a lot of moving parts,” Kolquist said. “The professionals from ISS took the time to understand our objectives and to structure a tailored solution beneficial to LSI, its shareholders, and its employees.”
LSI provides lending and member service to over 300 credit unions, banks and mortgage companies. Launched in 2012, ISS is a financial advisory practice specializing in ESOP consulting services.