Employees now own 49 percent of NewAge Industries
Plastic tubing manufacturer NewAge Industries announced that its ESOP – Employee Stock Ownership Plan – has purchased another nine percent of the company’s stock, bringing its ownership total to 49 percent.
NewAge CEO Ken Baker announced the transfer at a recent company-wide meeting.
“We underwent an initial evaluation over 10 years ago to determine the value of the company’s stock,” said Baker, “and I sold 30 percent to the ESOP. I sold another 10 percent in 2013, and now, with this additional nine percent, it brings the total ESOP ownership to 49 percent. I’m very pleased to be able to give back to our team members and their families in this way.”
The transfer took place June 30.
Baker noted that the value of the shares are given to employees after retirement and are at no cost to employees.
“The shares are bought by the ESOP through an internal company loan. Employees receive an annual statement showing how many shares he or she owns and the current value of those shares. When a team member retires, the ESOP buys back that team member’s shares, and the team member gets a nice sum of money for retirement,” said Baker.
So why an ESOP? Why not just sell to a competitor?
“My father started the company, and I watched him grow it into a successful corporation. I’ve been here 30 years, and I didn’t want to see a competitive buyout and then watch all that hard work be broken apart or assimilated. It’s important to me to see our dedicated team members – especially the long term people – rewarded for all their hard work,” Baker said.
Baker observed that the importance of the ESOP is illustrated in a number of ways. It’s a succession plan that keeps everyone employed, and it gives employees the pride of ownership. Having the ESOP in place also improves morale and camaraderie and benefits customers because team members understand that their everyday actions affect their retirement benefits.
“The company’s future is quite bright,” noted Baker, “and shifting another percentage of it to the ESOP is exciting. We’re all looking forward to making NewAge even more successful.”