By Mike Mangiore, Chief Financial Officer, S. M. Wilson & Co.
The moment employees start asking about discounted cash flow models, you know something has changed.
At S. M. Wilson, that moment came when our ESOP share price began climbing quickly. What had once been a simple annual announcement suddenly became a topic of real curiosity for employee-owners across the company.
As CFO, it forced us to rethink how we communicate financial performance and translate complex valuation concepts into something meaningful for the people doing the work every day.
What Tripling Our ESOP Share Price Taught Us About Communicating Like Owners
1. Meet People Where They Are
The single most important lesson we’ve learned is that one-size-fits-all communication does not work.
S. M. Wilson is a 105-year-old construction management company that transitioned to an Employee Stock Ownership Plan (ESOP) in 2006, with a 100% transition in 2014. Our workforce includes project engineers, field superintendents, estimators, accountants and marketing, technology and more. They all care about their ESOP accounts, but in very different ways and to varying degrees.
If I stand at a podium and start talking about weighted average cost of capital, I’ve already lost most of the room. You have to understand what matters to each person, what their ESOP value means to them and how their work drives it forward.
When we announce a new share price, we now use a tiered approach. Not everyone participates at every level — and that’s the point.
1. First, our CEO provides a high-level overview of the key drivers — the three or four things that moved the needle.
2. A week later, we offer optional deep-dive sessions, both virtual and in-person, where I walk through the valuation report’s reconciliation sheet line by line.
3. For anyone who wants to go even further, we invite them to sit down directly with our valuation firm.
2. Communicate Year-Round, Not Once a Year
Valuation is an annual event. Communication cannot be.
We’ve made open, transparent financial communication part of the fabric of the company throughout the year.
1. We host “Coffee with the President” rotating between the office and job site visits once a month for one-on-one conversations between our CEO and employees about how things are going.
2. Our executive team hosts quarterly coffee chats where we discuss what we won, what we lost, where our projections stand and what we are focused on for the year ahead.
3. At valuation time, we tie those conversations back together. Remember when we talked about that healthcare project win in Q2? Here’s where it shows up in the valuation.
If you haven’t been having conversations throughout the year, it’s very hard to connect
the dots retroactively when the share price is announced.
3. Build a Network of Peer Translators
The most powerful communication happens peer-to-peer.
When an executive leader delivers the most perfectly worded explanation, there will always be someone thinking, “That guy doesn’t know what it’s like to do my job.” When an estimator explains the valuation drivers to another estimator, or when a project manager connects the dots for their team, the message lands differently.
We’ve encouraged employees who are naturally curious about the valuation process to attend our deep-dive sessions and meet with our outside partners. They organically carry that knowledge back to their teams. This is not a formal ambassador program. We simply create the conditions for knowledgeable, trusted colleagues to share what they’ve learned.
4. Focus on Tangible Actions
Construction is not a single market. It reflects the health of many markets — education, healthcare, retail and commercial.
We cannot control external forces. What we can control is how happy our clients are, so we focus our internal communication on controllable factors. — how well we perform our jobs, how we proactively get in front of potential clients, and how effectively we communicate our value proposition when pursuing new work.
We also try to shift how employee-owners think about company spending. I do not like the term expenses. Everything is an investment. When we frame it that way, people naturally start asking: What is the return on this? Is the company getting value out of this decision? That is not about cutting costs. Sometimes the right move is to spend more because the return in efficiency, new business or client relationships justifies the expenditure.
If someone only spent half of their client entertainment budget, the right question is: How could you have invested those funds to build relationships that fill our pipeline? Because at the end of the day, it’s their money. We never lose sight of that.
5. Embrace Your Role as a Translator
A CFO role in an ESOP company is different.
The job is less about compiling financial statements and more about interpretation and translation — weaving together the story those numbers represent.
Every new hire at S. M. Wilson sits down with me for about an hour and a half during their onboarding. We go over the work-in-process report, walk through the company’s financials and talk about what the numbers mean.
Most of what I say will not stick on day one. That is fine. The most important takeaway is the message that my door is open. When a question comes up three months from now, they feel more comfortable to come find me.
6. Build Trust Through Transparency — In Both Directions
Communication is as important when things are going well as when they are not.
If we are not upfront about challenges, our team will not believe us when things are going well. They also will not buy into the plan we develop to address issues.
When you sit someone down and say, “We have problem A, problem B and problem C, and I need your help fixing them — here is the plan,” they have to trust that you are telling them the truth. If they do not, they will not stick around. And then you have a much bigger hurdle.
Transparency also means being honest about what you do not know. For instance, we are still figuring out how to effectively communicate with union employees who, while not ESOP participants, are very much part of our work. Admitting that we have not solved that is part of the same culture of transparency.
7. Listen to the Ground
No matter how much effort you put in, some of the responses on employee surveys will include feedback that you can communicate better.
The key is to not let criticism be demoralizing, keep sending surveys and also seek out more depth of feedback. After every major communication, we also sit down with trusted people on the ground and ask these questions:
1. Did the message land the way we intended?
2. What are you hearing now?
3. What questions keep coming up?
Sometimes this input tells us our carefully crafted message did not translate as planned. That can be tough to hear, but if you are going to improve you can’t take honest feedback personally. Those trusted team members have to know you will receive their input with appreciation, not defensiveness.
8. Remember The Real Driver
Communication strategy doesn’t single-handedly transform employee engagement.
Four years ago, two or three employees had ESOP account values over $100,000. Today, roughly 50 do. When real, life-changing money shows up in people’s accounts, it is natural for them to pay attention. The growth in share price created the demand for better communication. It opened the door, and our job is to make sure people understand what walked through it and how to keep it going.
Ultimately, success is less about valuation models or communication frameworks than it is about making sure every employee-owner believes that what they do makes a difference. Because it does. You just have to tell them. All the time.
As I walk past our office manager’s desk every morning, I remember that she is an owner of this company, too. I have a responsibility to make sure she has the information she needs to make good decisions — because we ask a lot of her and her impact makes a difference to all of us.
Mike Mangiore is Chief Financial Officer of S. M. Wilson & Co.
Founded in 1921 and headquartered in St. Louis, S. M. Wilson is a 100% employee-owned construction management, design/build and general contracting firm. Mangiore has been with S. M. Wilson for 15 years, integratively involved in guiding its financial strategy through the transition from family ownership to ESOP status. A Certified Construction Industry Financial Professional (CCIFP), he is known for driving
transparency, operational efficiency and sustainable growth.