Why We’re An ESOP Company
By Ann Phy
NewAge Industries manufactures plastic and rubber tubing in Southampton, Pennsylvania, just north of Philadelphia. In 2006 we became a partially employee-owned company when Ken Baker, CEO and majority shareholder, sold thirty percent of the S corporation to an employee stock ownership plan (ESOP).
Baker sold another ten percent to the ESOP in 2013 and in June 2016, transferred an additional nine percent, bringing the ESOP’s total ownership to forty-nine percent. Why? Because having employees become invested in the company instills the pride of ownership, puts a succession plan in place and discourages buyers that may target NewAge for acquisition.
A company-wide meeting is held annually and individual ESOP account statements are distributed to all employee owners. Although we know the company is very successful, we’ve still been pleasantly surprised to see the amount of money growing and waiting for us at retirement. Since its inception, the value of our ESOP has increased nearly sevenfold, growth that’s hard to beat with most any other type of investment.
Crucially, NewAge Industries’ ESOP helps us carry out our founder Raymond Baker’s business philosophies – provide high quality products, selection, quick delivery, old-fashioned personal service and a fair price. Today, asking “How may I help?” is a hallmark of our company culture.
Our ESOP puts more decision making, customer satisfaction goals and future success into our hands. Financial and recognition-based incentives encourage everyone to think of the customer first and to look for ways to improve processes, products and ourselves. A tuition reimbursement plan encourages employees to continue learning and growing. An employee referral program awards money to employees who recommend others for employment at NewAge. Wellness, Fun, Safety and Helping Hands committees engage employees as we help ourselves and our community.
NewAge Industries has expanded carefully in recent years and continues to do so. We’re currently renovating space for new production and storage areas and have job openings in several departments.
The media shares news of companies across all industries being bought and sold on a regular basis. ESOPs are a means to succession and can help dispel employees’ fears of competitive buyouts, plant closures and job losses. It’s a viable option that involves employees on many levels as it improves morale, and most importantly, benefits customers and the future success of the company.
NewAge® is a registered trademark of NewAge® Industries, Inc.
Ann Phy is NewAge Industries’ Marketing Coordinator and a 26-year employee. She has witnessed the company grow from 25 employees to 130 and from a small distributor to the multi-million dollar, respected manufacturer it is today.