Brown Construction, Inc. becomes 100% employee-owned

After 60 years as a family business, West Sacramento-based Brown Construction Incorporated has announced it has become 100% employee-owned. Brown Construction is ranked by the Sacramento Business Journal as Yolo County’s 18th largest employer with 130 employees and among the largest locally-owned general contractors in the greater Sacramento area.

Ron Brown, Brown Construction’s President and CEO and second-generation owner of the company, made the emotionally-charged announcement to his employees at the Sheraton Grand in Sacramento on Friday, “As of today, you all are the new owners of Brown Construction.” He was met with a standing ovation from the ballroom of employees gathered.

“An ESOP creates a great retirement benefit for our employees and ensures that our employees are rewarded for their hard work and the success of the company.”

_{Ron Brown
President & CEO}

Brown Construction was founded in Sacramento in 1964 by Ron’s father Bill Brown. Ron purchased half of the company in 1996 and the remaining shares in 2002. In 2007, Ron distributed stock to longtime employees Liz McCapes and Matt DeFazio (who retired last year). After significant consideration of the succession options, Ron selected the one that offered the greatest benefit to their employees. “Remarkably, 30% of our employees have been with the company for over 10 years. We’ve got incredible longevity among our staff here at Brown. To me, it was critical that all employees would keep their jobs and salaries, and keep this thriving company culture that is so strong here at Brown,” says Brown.

With the help of Burlingame-based The Menke Group, Brown Construction has extended ownership to their employees by way of an Employee Stock Ownership Plan, commonly known as an ESOP.

In addition to helping create financial security for employees, the ESOP is designed to encourage and reward increased employee productivity and efficiency. According to The Menke Group, a 10 percent increase in individual employee productivity can result in increasing company profitability by 50 percent or more. The ESOP creates a direct link between employee productivity and employee benefits, and nurtures a collaborative culture where the employee-owners and the bottom line can thrive.

“An ESOP creates a great retirement benefit for our employees and ensures that our employees are rewarded for their hard work and the success of the company,” says Brown. “It is important to note that the leadership of Brown Construction is not changing. I will continue to serve as president and CEO and Liz as executive vice president. It is also important to us that our current and future clients know that there is a transition plan in place and that we will continue to operate for many years to come, with all our valuable employees now being owners of the business.”

Brown Construction has built notable projects in the Sacramento area including The Barn and 805 Riverfront apartments in The Bridge District in West Sacramento, Gio apartments on Stockton Boulevard at Highway 50, and The AJ apartments, the first project built in The Railyards.