NewAge Industries now 100 percent employee owned
NewAge Industries, the Southampton, Pennyslvania-based plastic and rubber tubing manufacturer, is now entirely owned by its employees through an employee stock ownership plan (ESOP).
A company-wide meeting held Sept. 5 was the culmination of a plan first considered by CEO Ken Baker more than two decades ago.
“I’ve had a lot of other business owners ask me, ‘Why employee ownership? Why not just take the highest offer and walk away?’” said Baker. “And my response has always been, because I don’t want to see the company that my father started, and that we’ve worked so hard to build, get broken into pieces, or shuttered, or absorbed by some big conglomerate.”
NewAge’s ESOP was initiated in 2006 when Baker sold 30 percent of the company to its employees. Ten percent more was sold to the ESOP in 2013, and another 9 percent in 2016, bringing the total percentage of ESOP ownership to 49 percent. Since its inception, the share price has appreciated 975 percent.
Baker said the ESOP is one way to reward long-term team members after they retire.
“Many people have misconceptions about how an ESOP works. It doesn’t cost the employees anything. It’s overseen by a trustee, whose job it is to handle the ESOP’s assets in the best interests of the employee-owners. The company receives tax benefits, which in turn benefits the ESOP. And, yes, the business owner can make a nice sum from the sale of the company’s stock. Everybody wins,” said Baker.
Joel DeVine, NewAge’s quality control supervisor and a 14-year team member, said, “ESOP means that we as owners have an understanding about our company and how we all play a fundamental role in not only the success of our business but also in the health of our retirement by remaining focused on our customers and our team members.”
“I am proud to be a part of something that affects so many people, our customers and their customers, all of my fellow owners and their families,” said Kimly Ourn, mold shop supervisor. “I consider myself very fortunate to have become part of the NewAge team seven years ago. I worked at several jobs prior to NewAge, and not many offered benefits and nothing like what we have here. Working here has made a big difference in my life. I’m healthier and happier, and knowing that I can retire with a piece of something that we’ve all helped build is like the cherry on top.”
For his part, Baker is happy to have a succession plan in place. “It keeps everyone employed at a progressive and very successful company, and it maintains the pride of ownership we’ve developed over the past 13 years.”
Baker also said, “It’s wonderful to see how everyone works together and works through challenges with the customer in mind. The plan assures our customers continuity in supply from a business partner that understands their particular needs.”
INDUSTRIAL SUPPLY MAGAZINE
The March/April issue of Industrial Supply magazine features an in-depth cover story about Joyce Lansdale and Vallen. Plus, we're featuring articles by contributing writers Dirk Beveridge, Frank Hurtte, and David Kahle, as well as interviews with numerous product and distribution industry experts.
