Boulder company shares $9 million with employees
Denver, CO Colorado
DENVER, Colorado ” Eleven-year FreeWave Technologies Inc. employee Melanie Duran says the wireless data radio maker is a great place to work. But you can judge for yourself.
The Boulder-based company says it has had profits every month since it hired its first employee in 1995. There have been no layoffs. Employees get company-funded retirement plans and bonuses based on profits and growth.
And there’s more: As part of a $113 million private-equity investment deal in 2007, FreeWave is sharing $9 million of investors’ money with its fewer than 100 employees as a reward for the company’s success. Shares are divvied up based on individual performance. FreeWave refused to disclose individual payments.
The $9 million, for eligible employees who were with FreeWave when it won the investment, has been paid out in three installments. Company founders Steve Wulchin and Jonathan Sawyer are handing out the last payments Thursday.
“We’re fortunate to have great bosses,” said Duran, a production lead. The extra money is helping the 33-year-old close on buying her first house.
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“This is something that in today’s economy Steve and Jonathan don’t have to do, and yet they’ve chosen to do it,” said Tim Ake, a Navy veteran and production manager who has been with FreeWave for about five years. “That inspires me to go and do likewise,” said Ake, who typically gives some of his bonuses to his church and to charity.
FreeWave makes use of technology originally created for the U.S. Navy to stop enemies from jamming American radio transmissions during World War II. Military, agriculture, utility, oil and gas and other customers use FreeWave products for applications such as controlling unmanned vehicles or monitoring remote equipment.
Despite the weak economy, the company expects profit growth in 2009 with its diverse customers. It didn’t release specific projections, but is looking to expand in Europe, Latin America and China.
Wulchin, FreeWave’s chief executive officer, and Sawyer, chief technology officer, formed the company in 1993 using Wulchin’s credit cards. Ake jokes that the two have such an open-door policy that they don’t have doors: Their cubicles sit in the middle of the office.
Wulchin and Sawyer said that in talking to investors, they made it clear they wanted to share any equity investment with employees.
“Honestly, we thought it was a great thing,” said Vivian Wu, a principal at TA Associates, which led the $113 million investment in 2007. “From our perspective, it showed they were thinking about this as a company, how to build a business. It takes people.”
Wu said the money would allow FreeWave to grow faster.
Michael Child, a managing director at TA Associates and FreeWave board chairman, likened the payouts to incentives like stock options that public companies give to retain employees.
Wulchin said his firm’s base salaries are “competitive.” He estimated voluntary annual turnover in the single-digit percentages.
Of course, twice-yearly bonuses that have averaged a total of $11,600 since 2003 don’t hurt in a workplace where Ake said employees’ responsibilities can go beyond their primary roles.
“It can be stressful, it can be tough, it isn’t always fun,” Wulchin said. “Here’s something we can make a difference on.”