CMBA Member Highlight!
W. J. Wheeler Insurance is Now a Cooperative
“It takes a lot of resources to do a conversion the way we did it. But now that we’ve done it, we are looking forward to having our board develop new strategy for growth and stewardship of our mission.”
W. J. Wheeler’s previous owner Michael Newsom had thoughts about turning the family business into an employee owned operation form the moment he started working there. After reading Companies We Keep, Newsom contacted Rob Brown with the Cooperative Development Institute (CDI) in the fall of 2015. A meeting between CDI and nine employees in early 2016 answered initial questions. Several meetings and workshops on topics such as governance, management, financials, business valuation and analysis were held over the course of 2016.
In spring of 2017, the remaining conversion question was how to effectively move previous owners and employees into new roles and relationships with each other. To explore this, the previous owners elected the employees to become the board of directors of the corporation and to put the cooperative governance structure into place PRIOR to the actual conversation. While this step stopped short of actual ownership and the weight of responsibility that comes with ownership, it nonetheless created a legal board of directors that would carry the weight of responsibility of governance for the current corporation.
Over the following two years, the books were laid open for the employee-board, which also developed a governance matrix to guide decision-making by the CEO, the board, and/or members; revised all of the company’s personnel policies; and developed an open book compensation plan.
Delaying the transaction until after extensive development work had occurred meant that the co-op is now beginning on very secure footing. “In some conversions, we’ve seen the transaction come first and then the trouble starts, so we’re glad we did some of the hard conversion work prior to the actual transaction… It takes a lot of resources to do a conversion the way we did it. But now that we’ve done it, we are looking forward to having our board develop new strategy for growth and stewardship of our mission,” says CEO Newsom.
During 2019, they negotiated a purchase and sale agreement, a post-sale employment contract for the owner-turned-CEO, and financing from the Cooperative Fund of New England (CFNE). The business changed hands on December 27th, 2019.
As the newest Maine Business to convert to a worker co-operative, they provide many teachable aspects for those looking to convert their business as well as for those looking to become worker-owners. Every conversion will be different, but the universal lessons to take away from W. J. Wheeler’s conversion are patience, careful planning, and open communication.
Congratulations to all the worker-owners of this longstanding, community-oriented organization!