ESOP Company Transitions to Perpetual Trust Ownership
On July 9, the iconic Organically Grown Company (OGC) announced that it is transitioning its ownership to a perpetual purpose trust. Prior to the transition, OGC was owned by employees and by the farmers it serves in an S corporation ESOP. OGC created a purpose trust, which, as it describes in its press release, "will eventually hold 100 percent of the ownership rights and will ensure that the company delivers positive economic, social and environmental impact and maintains its independence into perpetuity, never to be sold." Although some U.S. companies have created ownership through perpetual trusts, a common practice in the U.K., OGC is the first to use a purpose trust, which is designed to serve a mission, rather than a specific person or people. Employees, growers, and other stakeholders will now receive a share of profits, the remainder of which will be reinvested in the firm's environmental and social mission.