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Company Profile: 'Tis Better to Give and Receive

Benefit Dollar value

Medical insurance $1,800

9 workdays, with pay, for holidays 1,925

3 weeks' vacation 3,225

5 days' sick/personal time off with pay 1,085

Medical/dental/ optical allotments 1,500

BW 401(k) contribution (35% of employee contribution) 900

BW savings-trust donation 2,000

BW $250,000 term insurance policy 900

BW health-club allotment 480

BW educational allotment (tuition, books) 480

BW annuity of $500,000 500

FICA, disability and travel insurance, and so forth 5,000

Bonus of 2 months' salary (1994) 8,300

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TIMELINE

1961
Business Wire founded (October). One employee. One office. 150 news releases transmitted. $3,200 in revenues.

1962
Business Wire achieves profitability. 2 employees. One office. 1,200 news releases transmitted. $36,000 in revenues.

1966
Business Wire begins paying employee bonuses. (Payments suspended from 1989 to 1992, and reinstituted in 1993.) 3 employees. One office. 3,000 news releases transmitted. $210,000 in revenues.

1969
Pension-trust and profit-sharing retirement plans created. 7 employees. 2 offices. 3,800 news releases transmitted. $460,000 in revenues.

1975
"Medical/dental/optical allotment" benefit created to supplement health-insurance coverage. 11 employees. 2 offices. 8,400 news releases transmitted. $1.4 million in revenues.

1986
Spare office turned into a nursery to be staffed by working parents. 32 employees. 10 offices. 29,700 news releases transmitted. $7.2 million in revenues.

1992
401(k) plan created, with guaranteed corporate match of at least 10% of employee contribution. In first year, plan matched 35%. 162 employees. 16 offices. 55,400 news releases transmitted. $18.4 million in revenues.

1994
Deferred-compensation annuity introduced; subsidies created for health-club and education costs. 200 employees. 17 offices. 74,800 news releases transmitted. $28 million in revenues.

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INTERVIEW WITH THE EMPLOYER: LORRY LOKEY

When Lorry Lokey analyzes Business Wire's 33-year history, he makes a clear distinction between its early, slow-growth years and its more recent period of rapid expansion and increasing profitability.

By 1987 he had a core group of people who had worked with him for nearly a decade and who shared his corporate goals, values, and experiences.

Inc.: You're zealous about employee benefits.

Lokey: Absolutely. For a private-company owner, there's a relationship between sharing and greed. I live fine, and I couldn't care less about the country-club set. When I see a choice between giving money, through our various benefits plans, to the people who actually earned it for our company or giving it to the government in taxes, there's no question.

Inc.: What's the ideal package?

Lokey: You can't put together a perfect package in a year or two. You've got to keep adjusting it as your employees' needs and the tax rules change. The goal has to be to remove your employees' financial worries. Once you've figured out how, and they recognize the rewards of working for you, you'll build a nucleus of experienced, qualified people who will stay with you forever.

Inc.: Why not just pay higher salaries and eliminate complications?

Lokey: There are many reasons why I don't believe in paying more than the industry norm. For one thing, if you overpay a person and it doesn't work out, you've probably ruined his or her chances of finding the right job at the right salary someplace else. I've used benefits to create a system of financial incentives that reward people for staying with Business Wire as they become more valuable and experienced. We have five or six people who have worked at this company for so long and so well that any one of them could step in and replace me tomorrow. And there are five or six wonderful people behind them. If you just pay someone a high salary, another company can always outbid you tomorrow.

Inc.: Wouldn't that marketplace dynamic help keep costs under control?

Lokey: Well, from an employer's standpoint, it might look great if someone with a 15-year salary left and was replaced by someone earning $20,000. But I guarantee you, it ain't going to be the same. And when you have to do that with 15 or 20 employees all during the same year or so -- as we've seen our competitors have to do -- your company suffers. And that hasn't happened at Business Wire.

Inc.: OK, so your employees like you. But don't they also think of you as a financial pushover?

Lokey: Are you kidding? I nailed someone at one of our regional offices the other day for spending $21 on a first-aid kit. When I see an envelope with two 29¢ stamps on it, people hear from me. When people know that you expect them to live up to financial controls, they do. And when they get a bonus check for $6,000 -- the average size of our most recent bonus -- they see the logic. They understand that this company is run along the principle of investing its money wisely. Cost controls are part of that. So are comprehensive benefits.

Inc.: But aren't you siphoning away growth capital?

Lokey: At Business Wire, we've managed to remain debt-free while funding our growth and our benefits packages. We focus every capital-allocation decision on determining what area would most immediately benefit.

I guess we've proved that a small company can do both.

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IN IT FOR THE LONG HAUL

Number of
Length of employment employees % of total
Six or more years 66* 33.2%

Two through five years 55 27.6

Less than two years 78 39.2

Total as of 11/13/94 199

*12 of this group have been with Business Wire for at least 10 years.