In the early 1960’s, before the time of most private equity firms, our Founder, Sheldon Lubar, developed a new concept in corporate development he called Professional Ownership®. He asked the question, if there is Professional Management, why shouldn’t there be Professional Ownership®?
Mr. Lubar defined a Professional Owner as someone who is motivated to reinvest the company’s earnings back into operations and working capital to build the business and create a larger, stronger, more profitable company. Mr. Lubar believed that many owners of small businesses used their earnings to pay high salaries and distributions to themselves and their family to support their current lifestyle and personal needs. In the case of a large or public company, the CEO and senior management team typically were not significant shareholders so they were motivated to earn the largest salary, bonus and benefits that they could. Mr. Lubar believed in investing for the future and was not motivated by current compensation.
In his first experience implementing Professional Ownership®, Sheldon Lubar acquired Sorgel Electric Corp. Five years later, Sorgel had increased its earnings three times and then merged with Square D Corp., a prominent supplier of electric controls. The result was a record return on investment.
The proceeds from that sale were used to start Lubar & Co. which today, sixty years later, is an owner and builder of a group of successful manufacturing and commercial businesses that continue to reinvest earnings and cashflow to achieve equity appreciation and sustainable growth over the long term. It has been positive for everyone; owners, employees, and the community. This tradition of partnering Professional Management with Professional Ownership® continues under the leadership of David Lubar, President and CEO.