Although the ABC News coverage doesn't specifically mention the ESOP, Owner of Multi-Million Dollar Company Hands Over Business to Employees celebrates the fact that Bob Moore has sold Bob's Red Mill Natural Foods to his employees via an ESOP:
Moore's work is a way of life and his employees are a second family, which is why he announced this week that he's handing over the keys to his 209 employees.
Moore said he's gotten countless buy-out offers over the years, but he couldn't envision selling the business to a stranger.
"It's the only business decision that I could make," he said. "I don't think there's anybody worthy to run this company but the people who built it. I have employees with me right now that have been with me for 30 years. They just were committed to staying with me now and they're going to own the company."
The company will now be run by an Employee Stock Ownership Plan (ESOP) -- the idea being that a company's stock is put in a retirement plan for its employees, but the stock is never held or bought directly by individuals. When a vested employee retires, he can pull out money from the trust.
On his 81st birthday, an Oregon man, who gave his company to the employees, discussed how selling to an ESOP enables business owner(s) to have more control over the future of their company and reward the employees that helped build and grow it:
"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 revenue 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 and 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."
It's not that the offers aren't there. Hardly a day goes by that Nancy Garner, Moore's executive assistant, doesn't field a call or letter from someone wanting to buy the privately held company or take it public.
"I had four messages waiting when I returned from a recent vacation," she said. "Three of them were buyout offers." 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."
Hat tips to Bill and Todd.
For more information on the benefits of ESOPs, read our discussions on how ESOPs Increase Employee Wealth and Wages and Provide Greater Employment Stability and Increase Job Satisfaction. We have also discussed how the tax benefits of selling to an ESOP will become more attractive with the upcoming 69% Increase in Capital Gains Rates.