September 1, 1995

United Parcel Service to Become Employee-Owned

NCEO founder and senior staff member

Since 1945, United Parcel Service (UPS) has been broadly owned by its 28,000 management and supervisory personnel. Now the 315,000-employee company will make ownership available to all full-time employees. The company will be expanding its shares by about one-third and making these available to employees through share purchases and voluntary conversions of retirement plan assets. Presumably, as managers sell their shares over time, ownership will broaden further.

UPS has long been known as a highly regimented organization with very strict guidelines for job performance. According to UPS CEO Kent Nelson, however, the times now require a different approach. "The marketplace is changing rapidly and customer expectations are increasing....we are calling on our people at all levels to take direct responsibility for the customer's satisfaction." So the company is reducing supervision, giving employees greater decision-making latitude, building time into the day for driver flexibility to meet customer needs, and training employees on business development issues. Given this, Nelson said, "it is appropriate that our non-management people be given the opportunity to have a personal stake in the company's performance."

UPS shares are not publicly traded. Their assessed value has never gone down and has averaged a 15% annual gain since the management ownership plan began.