Which companies make all their employees wealthy?
Company bosses generally don’t have a great track record of sharing their business’s wealth with employees. In fact, the gap between workers’ wages and boardroom pay is getting wider.
But CEO of yoghurt maker Chobani, Hamdi Ulukaya, has bucked this trend by handing his full-time employees an ownership stake in the company that could make them potential millionaires.
Under the scheme, employees have been given shares worth up to 10% of the business when it goes public or is sold. This portion of the company came directly from Ulukaya’s own shares.
Speaking to the New York Times, Ulukaya said the goal was to pass on wealth that employees have helped to build since the company was founded in 2005.
“I’ve built something I never thought would be such a success, but I cannot think of Chobani being built without all of these people,” he said.
“Now they’ll be working to build the company even more and building their future at the same time.”
Two years ago, Chobani was estimated to be worth $3bn to $5bn. At this valuation, according to the New York Times, the average employee could get a payout of about $150,000, and some could receive as much as $1 million (the longer they have worked for the company, the bigger their stake).
Democratic presidential candidate, Hillary Clinton, whose economic agenda includes a plan to reward businesses for sharing profits with workers , praised the company for sharing its success.
Is Chobani an exception to the rule?
A transfer of shares like this is rarely seen in the food industry. However, the New York Times points to a notable exception: in 2010, the founder of cereal firm Bob’s Red Mill handed control of the company to its employees through a stock ownership programme.
Tech start-ups often offer employees shares as an incentive to join the company – and some of Facebook and Google’s early employees became millionaires as a result.
But Mr Ulukaya’s decision to give his employees a portion of the firm at a much later stage of its growth is more unusual.
Apple recently shared stock with workers who are paid by the hour – previously only executives and engineers received this kind of compensation.
Twitter CEO Jack Dorsey also made the decision to put some of his stock into an employee equity pool, with the aim of “reinvesting directly in our people”.
"It's very uncommon and rare, especially in this industry, for these kinds of programmes to be rolled out," said Jessica Kennedy, a principal at Mercer, the human resources consulting firm that worked with Chobani on the new programme, told the New York Times.
In the UK, the John Lewis Partnership is an example of an employee-owned partnership model where profits go to staff instead of shareholders.
All permanent staff at the John Lewis Partnership are partners and own the retailer’s department stores and Waitrose supermarkets. This means all employees, from C-suite to cashiers, receive the same percentage payout, which depends on the business’s profits.
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SOURCE: World Economic Forum