El Cajon-based manufacturer Taylor Guitars announced Monday it is transitioning to 100% employee ownership through an Employee Stock Ownership Plan.
"We have delighted in giving people the joy of music and hope to do so for generations to come," said Bob Taylor, co-founder and president of Taylor Guitars. "Becoming 100% ESOP allows us to ensure our independence for the long-term future and continue to realize our vision for the company as an innovative guitar manufacturer."
The ESOP is a type of tax-qualified defined contribution plan through which employees receive a retirement benefit linked to Taylor Guitars' future equity value. Employees at Taylor's production facility in Tecate, Baja California, Mexico, will participate in its American-based ESOP plan and European Union employees will be participants in a similar incentive plan available under EU regulations.
"While Bob and I are not retiring, we have been preparing for our eventual exit," said Kurt Listug, co-founder and CEO. "Master guitar designer Andy Powers is not only the wellspring of our guitar designs for the future, but he also joined our leadership team several years ago, and strengthening our leadership team has been essential to our succession planning."
Listug said he views the transition in ownership as the next step to ensure a sustainable future for the company while also providing a financial benefit to people who have contributed to its success.
"We believe we've created a special company, where passionate people can engage in problem-solving innovation, collaboration and respect," he said. "Securing our independence through an ESOP allows us to strengthen this
According to the company, Taylor Guitars will serve its customers, suppliers and broader community ``with the same passion and innovation it has before." There will be no changes to management structure, operations policies or practices.
Other ESOP companies include Clif Bar & Company, King Arthur Flour Baking Company and W.L. Gore & Associates.
Taylor Guitars was founded in 1974 by Taylor and Listug and has grown into one of the leading global builders of acoustic guitars. Taylor employs more than 1,200 people and currently produces hundreds of guitars per day in its factory complexes in both El Cajon and in Tecate.