Archive for April, 2016

Sharing the Wealth

April 29, 2016

yogurt-thThe news broke this week that the owner of the Chobani Greek yogurt brand (Hamdi Ulukaya) has decided to give a portion of his company’s stock to his employees via stock grants. The amount of stock granted to employees depends upon the employee’s role and seniority, with an average value of $150,000. These actually become active if the privately held company is sold or goes public.

I really like this for a whole lot of reasons. The main reason is that the employees of the company (who create the bulk of the company’s value on a day to day basis) will now be able to explicitly share in the wealth that they are creating. It will definitely give the (line) employees a powerful context for what they do each day, since they will have a slice of the company, (although admittedly, not large). It is a strong affirmation of the importance of the employees to the operation. This is very important, since many companies treat employees as unit costs to be minimized.

There are certainly good financial benefits for Chobani to do this. Tax write-offs, stock control, a friendly voting bloc of stock, decreased recruiting costs, potentially higher retention rates, etc come to mind. But no matter—this owner made a choice to share his wealth—and that is very cool. Let’s project, for a moment, that Chobani will join those (partially) employee owned companies that outperform their competition. If that happens, then Ulukaya’s somewhat smaller share of the company will be worth even more than his current share is. Everyone wins!

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