Boise ad agency Drake Cooper has new owners today. Lots of new owners.
The company converted to an employee stock ownership plan structure, according to former majority owner and CEO Jamie Cooper. That means about 50 of the company’s current employees now make up the ownership of the company.
“This sets us up for longevity,” Cooper said. “For us, it made sense to convert it. One-hundred-percent is owned by a trust, which is controlled by the employees.”
Drake Cooper provides advertising and branding services to a variety of companies. You might recognize its work for brands like CBH Homes, Proud Source Water, ICCU or Payette Brewing
Cooper joined the agency fifteen years ago, working alongside agency founder Bill Drake. Drake started the agency in 1978, and it went through a number of changes and names over the years. Drake got in an accident in the mid-2000s that made him think about succession planning, while at the same time Cooper was looking at his next phase. Cooper worked as a VP at Boise-based ProClarity, which Microsoft purchased. He joined the company and eventually took over as full owner.
Recently, Cooper started to think about his own succession planning.
“I’ve been running the agency for 15 years,” he said. “I’m at the age when you need to think about succession plan and set us up for what’s down the road. We entertained offers. We’ve had other agencies talk to us about merging or acquisition. It just didn’t feel right.”
He said the most likely buyer for a firm like DC would be an out-of-state ad agency.
“In an agency, your people and your clients are all you’ve got,” he said. “We could merge with another agency. It just seems like other agencies in the west are merging and acquiring all the time. But you potentially hurt some of those things – you lose jobs, your hurt culture, you lose clients.”
How to help employees
As he started to explore options, he looked at the ESOP model. Perhaps the best known employee-owned company in the Boise area is Winco Foods – and its headline-grabbing millionaire grocery clerks.
Cooper said he’s been thinking a lot about the squeeze on the middle class, and wanted to figure out how to make this transition work for his employees.
“I read this book called the Vanishing Middle Class. I feel like our country we’ve lost something in that regard,” he said. “How do I help people who work for us and stay there? We’ve had some employees that had been there a long time. You get (stock) each year, and as the company does well, the stock grows. You’re helping people build some savings. It’s one thing to keep people. It’s another thing for people to feel like they are part of something. It puts them clearly into the business more than being an employee there.”
‘I sold the agency’
He rolled out the change to employees last week. Each got a black box with a bottle of champagne, a couple of flutes – and a sealed envelope.
He called a meeting – set for just a few hours before the company’s annual (remote) Christmas party.
Instead of leading with the ESOP news, he asked the employees to grab the envelope. And he said a few words that might make folks nervous.
“I was like ‘I sold the agency.'”
He said the initial reaction was mixed.
“People were burying their heads… like ‘he called us together to tell us he sold the agency?'”
Then the reveal. As they opened the envelopes, reactions began to change.
“You could watch people’s face – some people were puzzled while others were cheering. You have to walk people through it: it’s a gift, it’s a trust. You don’t have to vote the next time we buy a printer.”
That stock ownership structure means that each employee is an owner – but it doesn’t mean they’re making day-to-day decisions.
“Everything stays the same, you just get stock. If you own Home Depot stock, you can’t walk into the store and tell them to move the lightbulbs from aisle ten to aisle four,” he said with a chuckle.
Sara Chase, who has worked for DC for nearly 40 years, said the move acknowledges the agency’s history and plots a path forward.
“Transferring ownership is the ultimate demonstration of what makes Drake Cooper special,” Chase said “This news is a nod to past and present connections with coworkers and clients that played a part in our history. As our clients know, these new owners will bring incredible dedication and commitment to doing great work. I can’t wait to see where we go from here.”
Cooper said the reveal was one one of his best days.
“It’s the most exciting thing I’ve done. My dad retired with a pension,” he said while noting that’s not very common anymore. “I think there’s emoting to the idea that there is something a company can do to help people.”
“If that’s the legacy for Drake Cooper – I’ll be really proud.”