Run for, by its employees: Paragus IT completes 8-year transition to being 100% employee-owned

The original employee-to-employee gratitude wall at Paragus Strategic IT in Hadley. The wall serves as a place where employees give each other kudos for a job well done. The company is officially 100% employee-owned, an eight-year transition that came to its conclusion in March.

The original employee-to-employee gratitude wall at Paragus Strategic IT in Hadley. The wall serves as a place where employees give each other kudos for a job well done. The company is officially 100% employee-owned, an eight-year transition that came to its conclusion in March. STAFF PHOTO/CAROL LOLLIS

Delcie Bean, the CEO  at Paragus Strategic I.T in Hadley, talks about the company’s move to being 100% employee owned during an interview Monday.  “I’m just another W-2 employee now,” he said. “I wanted to be treated exactly the same as everybody else.”

Delcie Bean, the CEO at Paragus Strategic I.T in Hadley, talks about the company’s move to being 100% employee owned during an interview Monday. “I’m just another W-2 employee now,” he said. “I wanted to be treated exactly the same as everybody else.” STAFF PHOTO/CAROL LOLLIS

Lyric Croteau, a client support manager at Paragus Strategic IT in Hadley, works at his desk on Monday morning. The company in March completed the transition to being 100% employee-owned.

Lyric Croteau, a client support manager at Paragus Strategic IT in Hadley, works at his desk on Monday morning. The company in March completed the transition to being 100% employee-owned. STAFF PHOTO/CAROL LOLLIS

Loryn Fadus, a project manager at  Paragus Strategic I.T in Hadley, talks about the company and her job there. She says of having an ownership stake in the company, “This is your future, and the company is what you make it out to be.”

Loryn Fadus, a project manager at Paragus Strategic I.T in Hadley, talks about the company and her job there. She says of having an ownership stake in the company, “This is your future, and the company is what you make it out to be.” STAFF PHOTO/CAROL LOLLIS

Jonathan Lovstedt, a project manager at  Paragus Strategic I.T in Hadley, talks about the company and his job there. The company in March completed the transition to being 100% employee owned.

Jonathan Lovstedt, a project manager at Paragus Strategic I.T in Hadley, talks about the company and his job there. The company in March completed the transition to being 100% employee owned. STAFF PHOTO/CAROL LOLLIS

Delcie Bean, the CEO  at Paragus Strategic I.T in Hadley, talks about the company, which  in March completed the transition to being 100% employee owned.

Delcie Bean, the CEO at Paragus Strategic I.T in Hadley, talks about the company, which in March completed the transition to being 100% employee owned. STAFF PHOTO/CAROL LOLLIS

By ALEXANDER MACDOUGALL

Staff Writer

Published: 05-22-2024 12:43 PM

Modified: 05-22-2024 8:16 PM


HADLEY — When the employees of Paragus Strategic IT’s Hadley office stroll into the office on a given morning, they know that they have a good reason to stay there.

After implementing the first stages of a plan in 2016 to transfer ownership of the business to its workers, the company completed that lofty goal in February to make Paragus 100% employee-owned, with company founder and CEO Delcie Bean transferring the rest of his stake in the company while continuing to serve in his position.

“I’m just another W-2 employee now,” said Bean on Monday from the firm’s Russell Street headquarters not far from the rail trail. “I wanted to be treated exactly the same as everybody else. So I wanted to make sure that there wasn’t any special benefit or program that I was receiving that wasn’t open to every other employee.”

Under the terms of the plan, known as an Employee Stock Ownership Plan, or ESOP, all of the employees at Paragus, which provides tech support for small businesses such as back-end security and migration to the cloud, receive shares of stock in the company every year, with the distribution of shares determined by the percentage of the employee’s salary on the overall payroll. For example, if an employee’s salary was 2% of the total payroll, they would receive 50 of 2,500 distributed shares.

“We’re very deliberately releasing those shares over a long period of time, so that as we add new employees, as we do acquisitions, as we grow, we don’t end up in the situation where we have a group of people who have significantly more stock than everybody else,” Bean said. “What we do want to reward is people who are here for a long time. And so the longer you’re here, the more stock you’re going to have, because each year you’re getting another allocation.”

For Loryn Fadus, a project manager at Paragus who has been with the company for five years, having an ownership stake in the company provides motivation for her and other employees to succeed and feel appreciated.

“A problem I always had at previous jobs is I felt like I cared more than the other people I was working with. I’m someone who takes a lot of pride in my work, and I want to do a good job and do my best,” Fadus said. “I feel like the employee ownership really encourages other people to do that. This is your future, and the company is what you make it out to be.”

In addition, ownership means that employees also have a strong say in how the company operates. At monthly “owner’s meetings” held outside of normal working hours, employees meet with Bean and voice their opinions on a given topic or initiative.

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“Like any other company, you’re going to have your ups and downs and frustrations,” Fadus said. “But it’s all those other things that keep you here. It’s that future and the flexibility outside of work.”

Jonathan Lovestedt, a fellow project manager at Paragus who joined in July, said it was the employee-ownership structure that drew him to work there.

“I was looking for a place that valued employees a little bit more than just a seat,” he said. “At previous companies I worked with, you felt very replaceable, so I wanted to come here where you have more input on things, where you have more of an investment in the company.”

The company traces its origins to 2003, when Bean was still a high school student, helping individuals set up computers in their own homes. The company later switched to helping businesses and acquired its current name, Paragus, in 2011, something Bean says comes from a variety of factors such as the name of his dog, Gus, and one of the Hadley’s signature agricultural products, asparagus.

“It did check the box of being this kind of unique word that we could define, and it has definitely served its purpose,” Bean said.

Since then, Paragus has made several acquisitions and has opened up a second office in Worcester, with a total of 65 employees in both offices. Bean said that the reasons he decided to make the company employee-owned partially stemmed from a philosophical belief in a more equitable way of running a company.

“I’ve always been discouraged by the significant growing disparity between the 1% and everybody else,” Bean said. “That’s not really reflective of what I see in most company cultures, where people are all working really hard and I feel like should be able to benefit in a more significant way.”

Bean also said have the ESOP in place also gives Paragus a significant edge when acquiring other companies, competing against other, larger private-equity firms.

“We need to be able to level the playing field with private equity,” he said. “The ESOP gives us a couple of tools that allow us to now compete with them fairly so that we can make as good a deal for the seller as the private equity group can in most cases.”

Alexander MacDougall can be reached at amacdougall@gazettenet.com.