A Look At Entrepreneurs With Similar Approach
Twenty-first-century entrepreneurs have adopted generous employee policies attempting to close the gap between both ends of the corporate ladder. Recently, Hamdi Ulukaya, Founder, and CEO of the popular yogurt brand, Chobani, announced that he would be giving 10% of his company to all of his full-time employees in the form of stock. The 43-year-old Kurdish businessman has worked wonders for the yogurt industry despite having no prior experience with it commercially. According to a report from Bloomberg, in nearly half a decade Chobani has become the leading yogurt brand raking in more than $1 billion annually. His little greek yogurt operation elevated the market share from less than 1% in 2007 to over 50% six years later according to an article in the Huffington Post.
The Washington Post detailed the company’s award units commonly referred to as “Chobani Shares” is dispersed amongst the organization’s 2,000 employees currently working full time. These shares have potential to reach 10% of Chobani’s privatized net worth which could become available if they go public or gets sold. The individual value of Chobani shares is dictated by the employees’ role in the company and based on its collective aptitude to meet objectives. Ulukaya’s strategy was initiated by a $750 million investment from TPG Capital in 2014. This allowed TPG to stake a claim of over 20% ownership in Chobani. Despite speculation that these employee benefits could potentially damage TPG’s stake, Ulukaya claimed this initiative was part of their agreement.
The reaction from one Chobani employee was a mixture of surprise and excitement. In a video interview with Syracuse, company worker Terry Edmonds shared her thoughts on becoming a partial owner with Chobani. Dedicating nearly a decade of her time to the organization, she doesn’t know what to expect from the recent announcement. Chobani has been the only employer that has granted her with such a unique opportunity. Still, Edmonds is confident that this is not going to alter how she views the company or how she conducts her work activity.
Ulukaya’s move may seem out of the norm for the food industry or a service provider, but they are not the first to invest in their employees.
In 1985, Winco initiated their employee stock ownership plan (ESOP). This allows workers to be personally involved with the value that the company inherits over time. In contrast to a traditional 401(K), employees are not required to do anything besides just that: work. Since its launch, Winco has gone from a mere 17 stores to nearly 100 nationwide resulting in a 20% stock increase annually. According to KTVB news, nearly 400 of Winco’s employees from the Boise, Idaho branch generated more than $1 million for retirement.
The Central Valley Business Times wrote that Sleep Train Inc. installed an ESOP in 2010 marking their 25th year in business. Qualified recipients were able to obtain stocks cost-free and at the time consisted of a group of over 1,000 employees. However, Biz Journals highlighted that after being acquired by Mattress Firm Holding Corp. in 2014, the ESOP was terminated, and the 26% employee stake would then be rolled into a qualified retirement plan.
Following in the footsteps of Winco and Sleep Train, Ulukaya’s recent move symbolized that compassion is staking a claim in the arena of commercial interests like never before. Tech industries are no longer the only ones looking out for the well-being of their workers. It is too early to predict whether or not other manufacturers will jump on the bandwagon but Ulukaya is setting the stage for an employee-focused future.
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