The Employee Ownership Update
May 2, 2016
Chobani Makes Headlines with Stock GrantOn April 26, the yogurt maker Chobani announced that members of its 2,000-person workforce would be receiving an ownership stake worth around 10% of the company. The extensive press coverage (see the New York Times and NPR, for example) struck a chord with the public, and that's because this is the opposite of the business stories we have become used to hearing. Chobani CEO Hamdi Ulukaya made his generous decision to provide stock to the workers at a time when most headlines are about income inequality, outsourcing, fights over the minimum wage, and deindustrialization.
See the NCEO's full commentary on Chobani and what it says about the state of employee ownership. We encourage you to forward this by email and social media.
Kodak Settles Stock-Drop LawsuitParticipants in Kodak's 401(k) and ESOP filed a class action lawsuit in 2012 after the Kodak stock in their accounts became worthless due to Kodak's bankruptcy, and on April 27 a federal district court judge approved a $9.7 million settlement. The suit alleged that Kodak CEO Antonio Perez held a town hall meeting three months before the bankruptcy filing, in which he told workers that the company would not file for bankruptcy and encouraged them to "hang in there."
"Hamilton" Will Share Profits with Actors and Stage ManagersIn an unprecedented move, the producer of the Broadway show "Hamilton" will share the show's profits—roughly $500,000 per week in New York alone—with around 30 employees, the actors and stage managers represented by the union Actors' Equity.
News Coverage of Employee OwnershipIn a CNN essay that starts with the recent announcement about Hamilton, Justin Talbot-Zorn and Jove Oliver talk about the politics of employee ownership, noting bipartisan efforts to support it, from Ronald Reagan and Russell Long to the Founding Fathers.
Several media outlets (here and here, for example) covered a hearing of the House Small Business Committee at which representatives of ESOP companies Messer Construction and Hardy Diagnostics testified. Committee member Rep. Janice Hahn (D-Calif.) put the ESOP companies in the context of the policy debate about income and wealth inequality. She said, "it's been really amazing to hear from our witnesses today that proved that you don't have to choose between people and profits." The hearing was about the Promotion and Expansion of Private Employee Ownership Act, which has been referred to the House Ways and Means Committee, and the meeting's background packet is available online (PDF).
In its Entrepreneur.com blog for April 28, Fox News reporter Steph Wagner recommends that entrepreneurs consider selling their shares to an ESOP.
A Fox News Entrepreneurs guest column by Chris Myers discusses lessons he has learned as a start-up CEO about how to share equity with employees. He says, "when everyone is an owner, teams can move mountains."
Give and Receive: Company-to-Company CollaborationThe NCEO will be compiling sample documents that we will make available in the members area of the website. If you have a template that your board of directors uses for self-evaluation or a form that you use in your employee review process, please send it to Corey Rosen at CRosen@nceo.org.
Upcoming EventsThe Beyster Institute of the University of California San Diego is hosting the Corporate Director's Exchange, which is part of the institute's program on corporate governance for ESOP companies. The program will be on the campus in La Jolla from July 24 to 26.
The Ontario Bar Association is hosting a meeting titled Company-Wide Employee Share Ownership: An International Comparison on May 10, and participants may join in person or via web. Speakers will be David E. Clark (Dale & Lessmann LLP, Canada), Graeme Nuttall OBE (Fieldfisher, UK), and Loren Rodgers (National Center for Employee Ownership, USA).
The Vermont Employee Ownership Center's annual conference will be June 2 in Burlington, Vermont.