Employee ownership is a very viable model for changing the way that business works. Here’s a great story from Forbes about WinCo, an employee-owned discount grocery chain that is taking very good care of its employees and their families, many of whom are now millionaires.
From the article:
“WinCo has more than 400 front line employees with more than $1 million in their ESOP accounts and hundreds of retirees similarly well set. Each year, it sets aside an amount equal to about 20% of each employee’s pay, in the form of stock, and the value of the underlying shares has risen rapidly, too. Retirees can cash out their shares and in fiscal 2015, ending early next year, WinCo will have paid out approximately $200 million to retirees. Over the last seven years, it has paid out almost $1 billion to retirees. Retirees pay the usual federal and state income taxes on these payouts.”
Marjorie Kelly, in her latest book, Owning Our Future, talks about the opportunity to transform a huge chunk of our economy over to this powerful model in the next few decades as baby-boomer business owners retire.
“A wave of sales of closely held companies is beginning, and it is projected to go on for 20 years. These businesses account for close to half of private sector payroll, and in the last decade, they generated eight out of ten net new private sector jobs. According to a study by White Horse Advisors, only one in seven of these company founders expects to pass the business to family. An “age wave” of ownership transfer is coming.”
HT Seb Paquet