When Judy Spackman, 61, started working as a receptionist at Cando Rail Services Ltd. in Brandon 25 years ago, she felt it was a good starting place and the people were nice. Little did she know that, one day, she’d be an owner.
Born and raised in Neepawa, Man., Spackman moved to Brandon in 1987 to attend community college in the administrative accounting program. After graduating, she worked as an order operator at Richardson Greenshields for two years before coming on board with Cando.
At Cando, she started out as a receptionist before moving into the accounts payable and receivables section. She later moved to the company’s offices in downtown Brandon. Today, she works for the abandonment department as their administrative assistant for trucking and rail logistics.
“Cando Rail is a railway associated company,” said Spackman. “Anything that they do has got to do with a railroad in one way or another, from tearing up abandoned tracks and building new tracks to selling components of the track.”
Seven years after she joined the company, Cando’s owner introduced Judy SpackmanJudy Spackmanan employee share ownership plan (ESOP). Unsure at first if she wanted to opt in, Spackman changed her mind when she saw the returns some of her colleagues were taking home.
“It happened in 1996,” said Spackman about the ESOP. “It was something that Gord Peters, the owner, knew about. He understood the process of employee ownership and thought it would be a good fit for Cando employees.”
Some employees went into it right away. “By year two, you could see what those people got, the share payout – putting their money into the company, they shared its profit,” she said. “That got me thinking that it was a good idea, so I started working the second year, trying to make sure I had enough matching funds to be able to participate in the program.”
In 1996, shares in Cando were worth $2.74. They are now worth more than $40.
The ESOP is set up as a retirement savings plan, wherein employees can make monthly contributions. “They helped us set something up within the company to be able to contribute to an RSP through payroll deduction,” explained Spackman.
Everybody qualifies to buy a block of shares, according to a formula based on a percentage of their T4 or total earnings. Also, employees are given a $100 bonus for every year they have been with the company. “Say they made $50,000, that’s times four percent, so they would get $2,000 of a match there,” she said. “And, for me, I’ve been with the company for 25 years, so I get $100 for every year I’ve worked. So, I get a $2,500 match…. I’d qualify for a $4,500 match.… If I bought $4,500 worth of Cando shares, they’ll match those funds and give me $4,500.
“So, now I have $9,000 worth of Cando shares…. The formula and the calculation is the fairest way to do it.
“You don’t have to do that match if you choose not to. You could only put in $2,000, then they will only match you the $2,000. If you don’t match your true potential, you don’t get that potential match. So, it gives you the initiative to make sure you put away enough to cover your match.”
Spackman’s first-year share block investment is now worth more than $25,000. She has created a spreadsheet to keep track of her shares and their growth and, as she is nearing retirement, she has made a second spreadsheet called, “Retirement.”
“Knowing the difference between RSP and non-RSP, and knowing the best way to have a mix of both and how to be diversified is key,” said Spackman. “You don’t want all eggs in one basket.
“It does make you learn a lot about finances and projections, and looking past today and into the future – doing calculations to make sure you have enough in your retirement fund.”
There is no pension offered at Cando. Instead, by creating this program, Peters gave his employees a way of creating their own pension plan.
“It’s an individual choice of how much you want to go in,” explained Spackman. “You can max everything into this and make it grow. Some are uncomfortable going in very much, [but] when they learn the system and see and do calculations, they realize the potential of growth is amazing.”
Peters’ philosophy is that employees work hard to make a company successful and that they should share in the success; shares in ownership give employees a more vested interest in the company.
“He takes great pride in people who learn the program and understand the financial and growth side of the program,” said Spackman of Peters. “I think it’s a viable program for any company and is feasible and acceptable for companies to run a program like this and be successful.”
The ESOP has helped Cando’s performance because employees who are also shareholders benefit directly when the company does well. There are “quarterly reports on how the company is doing, so we know throughout the year what’s going on and it tells us [about] new business, what’s coming up, giving us an idea of what the company is doing and how it is growing,” explained Spackman.
Every May, the projection/payout conversation starts, and the employees go back to work for another year. It’s like playing the lottery except in this case they are guaranteed to win as long as the company grows and they have some shares.
“There is a possibility that some years we may not get a payout or a big growth in the company, like this year,” said Spackman. “Worst-case scenario, it may stay the same one year. But, that’s OK, because we retain … our shares.
“You have to be in the real world. There is potential for this to go down. In 18 years, I haven’t seen it go down, but you have to keep that in mind. You have to have other investments.
“Being a Cando shareholder gives me pride, being an employee-owner. It’s an avenue for a comfortable retirement and a financial education that benefits my personal financial practices.”
Rebeca Kuropatwa is a Winnipeg freelance writer.