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A nice story, for a change
Make sure you catch Marketplace tonight, so you can hear from 81-year-old Bob Moore. Moore owns Bob's Red Mill Natural Foods based in Oregon. Well, he did own it. He just handed over the entire operation to a group of 209 people -- his employees.
"This is Bob taking care of us," said Lori Sobelson, who helps run the business' retail operation. "He expects a lot out of us, but really gives us the world in return." Moore declined to say how much he thinks the company is worth. In 2004, however, one business publication estimated that year's revenues at more than $24 million. A company news release issued this week stated that Bob's Red Mill has chalked up an annual growth rate of between 20 percent to 30 percent every year since.
"In some ways I had a choice," Moore said of what he could have done with the company he founded with his wife, Charlee, in 1978. "But in my heart, I didn't. These people are far too good at their jobs for me to just sell it."
Moore had several buyout offers but instead opted for an ESOP, an employee stock ownership plan. The company contributes its stock to the plan, and the stock is held in trust for the benefit of the employees. Moore's executive assistant is Nancy Garner:
Garner said she and other employees are floored by Moore's plan, under which any worker with at least three years tenure is now fully vested. "We're still learning all of the details," Garner said, "but it's very humbling to be part of a company that cares this much about its employees."
"Eventual payouts could be substantial," said John Wagner, the company's chief financial officer and, along with Moore, one of four partners.
The constant stream of discouraging news sometimes makes us forget there are plenty of positive things still happening in our business communities. Thank you, Bob.
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My company is also part owned by an ESOP. I'm delighted to be a part-owner in the operation. And it's a great retirement plan. My company is also stepping up to become 100% ESOP.
Although my share of stock doesn't bare much decision power, I can connect the progress I make in my company directly with a benefit I receive with stock-dividend.
Bob Moore isn't just a great guy. He also makes fantastic oatmeal! I eat his Scottish Cut Oats nearly every morning, and they're fantastic. My wife and I have been in this rut for several years, but the ritual hasn't gotten old, mainly because the product is fantastic, especially topped with some in-season fruit.
This story makes me proud to be a loyal customer. Kudos to Bob Moore for his selfless leadership, and to Scott for spreading the word about this great story!
Another great ESOP with a grain-y basis: King Arthur Flour in Norwich VT. Visit: http://www.kingarthurflour.com/
I'm looking forward to taking a class with them this spring on the art of the baguette, they are a great company.
All too often we only see the impersonal greed in the business community. Too many business men see their labor force as an expendable commodity. Currently, where I work we are referred to as "resources", as if we are simply raw material. It would be nice more people in business saw their employees as important contributors to company success. Thanks for sharing the story, it gives me hope that there are decent people running some companies out there.
Bob seems like a great guy, and I have used his company's products and like them. I also wish his employees well with the ESOP. Having said that, as an analyst and a participant in an ESOP, I wish Marketplace had done more analysis of ESOPs and the ESOP structure. As I understand it from personal experience, an ESOP allows an owner to sell the company (monetize their investment) without giving up control (for a while, anyway). Also, the ESOP usually finances the transaction with debt, which means that the ESOP has a huge debt load in the first years, and ESOP participants have to wait years until their shares are worth something. Finally, I believe there are tax benefits to the sellers. I would like to hear a marketplace story that delves into the complexity of the ESOP structure, the advantages to sellers (vs. employers), and that looks at how various companies have fared post-ESOP.
Thank you for bringing up the realities of an ESOP. In listening to the story it made it sound as if the owners were gifting the company to its employees. For people who are not familiar with the nature of ESOPs they could be mislead by the way the story was presented.
I agree with you, Bob does sound like a wonderful person. And his employees are being given a great opportunity. But the story as presented was not clear.
Jim, I appreciate your response. I'd actually love to hear a story that delved into ESOPs more fully. As I understand it, there are definitely opportunities involved for employees, but I think there also have been some notable failures (e.g. bankruptcies) of ESOPs. Personally, I'd like to better understand the pros and cons, and, in general, what is a realistic time frame for them to accumulate enough capital to be meaningful for employees (10+ years?).
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