Applied Becomes an ESOP
In addition to celebrating 40 years of Applied, we’re also celebrating 20 years of being 100% employee-owned!
The journey to being employee-owned was a long and strategic one.
In the early 2000s, as Dwight Hinkel was preparing to retire as CEO of Applied Engineering, the leadership team — including President Dave Raatz and CFO Chris Billing — began thinking carefully about how to navigate this transition, both financially and culturally. The goal was clear: find a path that honored Dwight’s legacy, protected the employees who had built the company, and positioned Applied for long-term success.
Applied Enters the ESOP
The answer they landed on was an Employee Stock Ownership Plan, or ESOP — a structure that would allow Dwight to exit while placing ownership directly in the hands of the people who showed up every day to do the work.
“[It] was seen as the best solution for helping Dwight exit the company while taking care of the employees and providing incentive for their future. It was seen not only as a retirement benefit, but as a way to have an employee-owner culture at Applied.”
— Dave Raatz, President & CEO of Applied Engineering
In 2002, Applied Engineering officially became part of the ESOP as a partially employee-owned company. By 2006, Applied had reached 100% employee ownership — a milestone that has shaped the last twenty years and will continue to drive Applied into the future.
What is an ESOP?
An ESOP, or Employee Stock Ownership Plan, is an employee benefit plan that makes the employees of a company owners of stock in that company. Unlike a traditional 401(k), employees don’t purchase shares — they earn them as a benefit of employment, with their account growing over time based on company performance and years of service.
Research consistently shows that ESOP companies outperform their non-ESOP counterparts in several key areas:
- Employee motivation and engagement — when you own a stake in the outcome, you care more about the result
- Retention — ESOP companies tend to keep talented people longer because leaving means leaving real financial value behind
- Local economic impact — employee-owned companies are far less likely to be sold to outside interests or relocated
- Business longevity — shared ownership creates a culture of stewardship that sustains companies through change
For Applied, the ESOP wasn’t just a financial vehicle — it was a statement of values.
Employee Reactions to Joining the ESOP
When the ESOP was first introduced, not everyone immediately understood what it meant in practice. The concept was new, and the long-term payoff wasn’t yet visible. But employees trusted the leadership team’s judgment — and over time, that trust was repaid many times over.
“I’m glad Applied is an ESOP because it showed not only a good financial decision, but also the human and personal side of the company, which is one of [Applied’s] unique qualities.”
— Fred Renner, former long-time Applied team member
That “human and personal side” Fred describes is not accidental. It’s baked into the very structure of employee ownership, where every person has a direct stake in how the company performs.
What It Means to Be Employee-Owned
Being 100% employee-owned creates something that’s hard to manufacture any other way: a genuine culture of shared accountability. When the company does well, everyone benefits. When challenges arise, everyone has a reason to pitch in.
“I think that’s one thing about being an ESOP. It brings each employee back to if they were to start a company. They’re not just employees… We all want our value to go up. We want things to be good for the company, [so] you try to make [everyone’s] lives a little easier by helping them out and going above and beyond.”
— Chris Billing, former CFO of Applied Engineering
This startup mentality — the sense that every decision matters and every person contributes to something larger — is one of the defining qualities that has set Applied apart for four decades. It’s the reason clients notice a difference when they work with Applied’s team, and it’s the reason clients stay with us for the long haul.
Looking Ahead: The Next Chapter of Employee Ownership
Twenty years of 100% employee ownership is not just a milestone to celebrate — it’s a foundation to build on. In an industry where firms are frequently acquired or consolidated by outside investors, Applied’s structure offers something rare: stability with purpose, where decisions are made with the long view in mind.
Applied has always believed that taking care of people is good business. Forty years in, twenty years as 100% employee-owned, that belief has never been more validated — or more important to carry forward.
In the next article, we’ll introduce you to Applied’s current President and CEO, Dave Raatz!