NEW BERLIN, N.Y. – Last week, 2,000 full-time employees of Greek yogurt company Chobani (a NACS Hunter Club member) received a huge surprise: an ownership stake that could make some of them millionaires, reports The New York Times.
Hamdi Ulukaya, who founded Chobani in 2005, told employees that he would be giving them shares worth up to 10% of the company when it goes public or is sold. The news source writes that Ulukaya’s goal is to pass along the wealth they have helped the company build.
“I’ve built something I never thought would be such a success, but I cannot think of Chobani being built without all these people,” Ulukaya told the New York Times in an interview. “Now they’ll be working to build the company even more and building their future at the same time.”
The new source notes that when Chobani employees received the news last week, they each received a white packet containing information about how many Chobani shares they were given. Since the shares are based on tenure, an employee who has been with the company when it began a little over 10 years ago now has a significant stake.
Two years ago, when Chobani received a loan from TPG Capital, a private equity firm, the company’s value was estimated at $3 billion to $5 billion. At the $3 billion valuation, the average employee payout would be $150,000. The earliest employees, though, will most likely be given many more shares, possibly worth over $1 million.
Rich Lake, lead project manager, is one of five original employees Ulukaya hired for Chobani’s plant in New Berlin. Lake told the news source that the shares recognize the personal investment he and other employees have in the company. “It’s better than a bonus or a raise,” he said. “It’s the best thing because you’re getting a piece of this thing you helped build.”
The transfer of money by Ulukaya touches on a hot-button economic issue: the rapidly expanding gap in pay between executives and average workers. The United States has one of the widest pay gaps, and the topic has played a prominent role in this year’s presidential race, particularly among the Democrats.
Some other executives have also taken this issue on themselves. A founder of Gravity Payments, a Seattle-based credit-card payment processing firm, last year promised to pay a minimum wage of $70,000 to his 120-person staff within three years.
The shares given to Chobani employees are coming directly from Ulukaya, notes the Times, adding that this type of transfer of shares to employees is rare in the food industry. “It’s very uncommon and rare, especially in this industry, for these kinds of programs to be rolled out,” said Jessica Kennedy, a principal at Mercer. Chobani already pays its employees above the minimum wage and offers full-time employees health and other benefits, as well as a 401(k) plan.
Ulukaya will maintain the vast majority of the company, though his portion will be diluted. “To me, there are two kinds of people in this world,” he told the Times. “The people who work at Chobani and the people who don’t.”