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Profitability, expansion, and beneficial ownership with an ESOP in the hose and fittings industry with Mike Mortensen

Episode: 87

Looking for a way to enhance company culture and boost revenue? Mike Mortensen, president and CEO of Alaska Rubber Group based in Anchorage, AK, has a proven solution: an employee stock ownership plan. Jason chats with Mike about his entry-level start in distribution, his company’s rapidly expanding physical and digital presence, and why owners of privately-held organizations should look to an ESOP when considering growth or exit strategies.

For many independent distributors, the thought of turning company ownership over to employees is as intriguing as it is intimidating. Most people think of ownership in the equity ownership model where I own the building. I own the trucks, I own the inventory, Mike explains. But ESOP options are endless; owners can choose the most suitable structure for their organization and their legacy. For Alaska Rubber, that meant pursuing a beneficial ownership model. The trust owns the company, owns the inventory, the assets and everything like that. And as an employee and a participant in the plan, we own the right to the rise or fall of the share price.

To say that the ESOP has panned out for Alaska Rubber is an understatement. While the model wasn’t an easy option for the company’s original selling party to buy into, the long-term benefits outweighed those initial doubts. Boy, it was the impetus of something great for our company, Mike says of the hose and fitting distributor’s subsequent growth.

Besides increased revenue, transitioning to an ESOP has provided the company with advantages in areas of recruitment, acquisition, and innovation. The company recently completed a massive website upgrade, for example and while on-site cash sales remains top tier, Mike says the fully integrated B2B e-commerce platform has captured business well beyond the counter. When I jump online and look at the heat map of the folks that are engaging with our website, it’s all over the country. Mike also credits forward-thinking tech companies like data partner Proton AI with Alaska Rubber’s success despite online pressure from behemoth pick-and-ship competitors.

Mike’s good fortune in the distribution industry is one he’s paying forward. He views his participation in both NAHAD (The Association for Hose & Accessories Distribution) and

IDCO (Industrial Distributors Co-op) as a way to contribute to the industry’s future. Boy, that personal and professional development that this industry provided it’s just so near and dear to my heart, he says, adding, I want to do everything that I can to preserve it and to give others the same opportunity to have that if they want.


DT082: Benj Cohen of Proton AI on Leveraging Sales Data with AI Designed for the Distribution Industry

Proton AI

NAHAD – The Association for Hose & Accessories Distribution

IDCO – Industrial Distributors Co-op


Alaska Rubber Group





Distribution Talk is produced by The Distribution Team, a consulting services firm dedicated to helping wholesale distribution clients remove barriers to profitability, generate wealth and achieve personal goals.

This episode was edited & mixed by The Creative Impostor Studios.


We’re all incentivized to grow the company like an owner because we are granted stock on an annual basis that can either appreciate or depreciate depending on our own efforts.

Since 2006, when we became an employee-owned company, we’ve only had one year where we had a stock decrease. We’ve had a couple of flats, but it’s been an increase ever since then.

The ESOP model has led to hockey stick growth in our organization, and so we’ve identified that as one of our core benefits and something that really differentiates us.

One of the reasons why I’m super passionate about independent distribution is because it afforded me so many opportunities to learn and grow. And one of those was the financial end of our business and really understanding how businesses make money.

I have been, not shocked, but sometimes surprised at how willing people are to help if you just ask.

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