Companies like New Belgium Brewery are realising that employee ownership plans can have positive benefits for the business.
Spotted: The New Belgium Brewery, which makes Fat Tire and Voodoo Ranger IPAs, among other craft beers, is using a unique management structure. The company is actually owned by the workers through an employee stock ownership plan (ESOP). So, the CEO actually works for the workers.
The plan is actually a financial vehicle, a trust that takes out a loan to buy the company. As the loan is repaid, the shares are distributed back to the employees. The result is that as the company grows and its stock grows in value, these shares also increase in value. The trust holds employees’ equity in the company, acting as a retirement account.
There are around 6,600 businesses in the US with some type of similar employee stock ownership structure, involving more than 10 million employees. What makes New Belgium different is the way the company has embraced the idea of giving employees a say in how the company is run, as well as in its profits. Suggestions from employees are acted on, not ignored, and workers have more freedom to manage themselves, so the company requires fewer managers.