Jose Esquilin headed out of Port Norris just after dawn to attend the 40th anniversary celebration of the Wildwood Wawa, where he works as an associate general manager.

Crossing the Maurice River from Cumberland into Cape May County, he stopped for coffee — where else? — at a Wawa, in the Dorchester section of Dennis Township.

But he couldn’t just get his drink. He also spent 20 minutes teaching the staff how to clean the new espresso machine.

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“That store is just seven minutes from my house, so I’m very much invested in that one as well as this one,” Esquilin, 29, said at the May 11 store party at the doo-wop-design Wawa in Wildwood. “If you walk into another store, and they’re hurting, you want to help. That’s the first thing I do.”

Wawa employees often feel strongly that their success is closely tied to that of the company, in large part because employee stock ownership makes it their company too.

Chuck Schlarp, 43, of Dennis Township and a general manager with 20 years at Wawa, said the company’s employee stock ownership plan “ties us, more than cash compensation, not only to my store’s performance, but also to helping out with my partners’ stores. To me, that’s huge. If they’re doing poorly, it affects my financial future too.”

Privately held Wawa is doing quite well, with more than 560 stores in the Mid-Atlantic region and expanding into Florida this year with six new stores.

Wawa, which started two centuries ago in Greenwich Township, Salem County, before moving to Wawa, Pa., in 1902, has long believed that giving employees an ownership stake makes the company more successful.

“Thinking like an owner is a big deal when you have as many customers and interactions and moments of truth every day as we have,” said Chris Gheysens, president of Wawa and a resident of Washington Township, Gloucester County. “It’s a big competitive advantage.”

This past year Wawa fought for changes in federal regulations to allow it to continue its employee stock ownership strategy. Last month, Gheysens attended the White House signing of the Jumpstart Our Business Startups Act that contained the needed regulatory relief.

Before the JOBS Act, privately held companies with $10 million in assets were required to become publicly owned and traded once they had 500 or more shareholders. That threatened a central piece of Wawa’s business strategy.

“If this change didn’t happen, we would have had to divert tens of millions of dollars in capital instead of building new stores and infusing local economies,” Gheysens said.

With the help of Sens. Pat Toomey, R-Pa., and Tom Carper, D-Del., Wawa worked to get the regulation amended to allow it to keep offering employees the option to purchase stock in the company.

In November, Gheysens testified before the Senate Banking Committee about the importance of employee stock ownership and remaining privately owned.

“We’ve been a privately held company for 200 years, and today we feel that’s a significant part of our growth and success, and will be even more important in the future,” Gheysens said. “As a private company, Wawa is able to take the long-term point of view. Our upcoming entry into Florida is based on looking at the next decade or two, not the next couple of quarters.”

The JOBS Act raises the limit to 2,000 shareholders for private companies, and also exempts employees and accredited shareholders from being counted toward that limit, he said.

“This directly provides us with the regulatory relief to live our mission and grow our business more, and help the economy,” Gheysens said.

There are two ways employees can have a stake in Wawa, said Michael Dwyer, an area manager overseeing 14 stores and resident of Egg Harbor Township.

Employees above a certain level in the company organization are offered options to purchase Wawa shares directly, he said.

The vast majority — 9,000 of Wawa’s 18,000 employees — are part of the company’s employee stock ownership plan, or ESOP, Gheysens said.

The ESOP is a retirement plan into which the company contributes stock every year, buying it with a portion of the company’s profits.

Gheysens said the employees, through the ESOP, own approximately 30 percent of Wawa.

Dwyer said the ESOP functions much like any other retirement plan, allowing employees who leave before retirement to roll it over into other approved retirement savings vehicles.

The National Center for Employee Ownership estimates that 28 million employees in the U.S. participate in an employee ownership plan of some kind, including one or more of the following:

n There are 10,900 ESOP retirement plans with about 11 million participants, up from about 2 million a decade ago.

n Another 11 million buy shares in their employer through employee stock purchase plans.

n An estimated 10 million participate in plans that provide stock options or other forms of individual equity.

n Nearly 5 million are in 401(k) plans that are primarily invested in employer stock.

Corey Rosen, a senior staff member and cofounder, said the National Center for Employee Ownership expects significant growth in ESOPs as baby boomers reach retirement, doubling the number of businesses for sale in the next decade.

“ESOPs provide a highly tax-favored way to transfer ownership,” Rosen said. “The company uses future pretax profits to fund the sale, the seller can get a tax break, and the employees end up as owners without using their own funds. Owners can sell all or part of the company and retain a role going forward for some time if they like, so it is ideal for many people.”

Rosen said studies show that ESOP participants have about 2½ times the total retirement assets of others with retirement plans but no ESOP. Usually an ESOP is an additional retirement plan.

That is the case at Wawa, which also provides a 401(k) and matches a portion of employee contributions to it, Dwyer said.

“Generally, ESOPs are a very good deal for employees,” Rosen said. “Most private companies do not have any retirement plan, and over half the work force is not in any retirement plan sponsored by their employer.”

The plans also work for the companies, since they closely align the employees’ interests with those of their employers.

A 2000 Rutgers University study found that companies grow more than 2 percent faster after setting up an ESOP than would have been expected. A National Center for Employee Ownership study in 1986 found that employee ownership firms which also practice participative management grow 10 percent faster.

The mutual support was evident at the Wildwood Wawa celebration, with the company honoring longtime employees and staffers dancing, singing and parading the company’s two-century history.

Schlarp said another advantage for employees is that the company’s business has seemed almost recession-proof.

“Their growth and value has done nothing but jumped forward, all the years I’ve been with them,” he said. “Wawa’s return has been incredible, outpacing anything else I know of.”

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