This is the best summary I could come up with:
Moore, who was 94 when he died, founded Bob’s Red Mill with his wife, Charlee, in Oregon in 1978.
In the decades that followed, the couple grew their whole-grain food company into a global empire that did more than $100 million annually, selling over 200 products in more than 70 countries.
When asked why he chose an employee-owned model during an interview with Portland Monthly last year, Moore, who was Christian, cited the bible.
“The more everyone organizes and works hard, the greater the profitability of the company, and that translates into higher value of ownership,” Moore told Portland Monthly.
In 2022, when some business leaders were complaining about a labor shortage, Moore said executive greed was to blame and that more companies could adopt the ESOP model, Fortune reported.
He said employees at Bob’s Red Mill feel valued and informed, an approach other companies could learn from.
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Bob Moore sounds like he was a good dude. If more business leaders thought like him we’d all be a lot better off.
I’m worried it’s the end of an era. They have really high quality product, all of it!
But that’s the point: that level of wealth and power is unhealthy. For literally everyone. We can’t just hope more of these insanely privileged people resist corruption and greed to do the right thing and treat their employees fairly (more than fairly, in this case). He was a good dude all right, but a huge exception to the overwhelming norm of wealthy people exploiting their workers…
Socalism is quite a nice concept and one that has the potential to be implemented at a large scale.
This sounds like a mondragon corporation, a specific type of co-op primarily from the Basque region: https://en.wikipedia.org/wiki/Mondragon_Corporation?wprov=sfti1#
ESOP is a thing… the question is who gets to make decisions. Is the board run by employees? I used to work for an ESOP, but the scheme was little more than a way for the founders to cash out on their investment by saddling the company with the debt to buy itself… all while still retaining control of the board. Despite being employee-owned, employees had no decision making power.
My wife’s company got bought out by an ESOP company. When she explained it to me, the whole thing sounded like a scam. I’m not qualified to explain it but it sounds like the stock never vests until you retire so no one has any control outside of the incompetent execs who run the thing.
Yeah… and a lot of companies use this to replace your 401k or in lieu of contributing to one. So, a big chunk of your retirement savings is tied up in the company and usually can’t be diversified until you’re pretty close to retirement age.
Alternatively, if you leave the company, many will let you take money out and roll it into an IRA, but it’s usually capped at like $5k per year. It can take a long time to get your money out.
That’s not necessarily a feature of ESOP.
My first ESOP vested 100% on day 1, we also had a 401k with matching, with a discretionary amount added from the company depending on how well the company did that year (never saw less than 10% of my salary in the years I was there). If/when you leave the company, you’re payed out within 3 years.
For my second ESOP it was a 3 year vesting schedule, no 401k matching and no discretionary amount (though ESOP contribution was ~10% of salary, depending on company performance). If/when you leave the company, you’re payed out starting at year 6, over a period of a few years (can’t remember exactly).
I say all this to demonstrate that these things can be set up very differently while all still being an ESOP generally.
Yeah, and basically my point was that ESOP doesn’t mean you can’t fuck over the employees. I’m sure some versions of it are really good, but until no versions of it suck, it’s hard to say it’s necessarily better.
It certainly is a step in the right direction, but it still allows some really shitty structures.
That said, good post and good examples.
People are careful with their words on this and often act like it’s a gift. It’s an ESOP so he sold it to his employees. That said, it’s still a better model than selling to a public company and I’m sure he did take a loss on it compared to that.
From the perspective of the employee it basically is a gift (more a benefit).
Employees don’t pay for stock in an ESOP; they’re earned by being employed there (with different options for how they’re divided, but restrictions so they aren’t excessively dominated by the highest earners).
