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Posted on November 5, 2020
Editor’s note: Daniel C. Kenary is Co-founder and CEO of Mass. Bay Brewing Company, Inc. (The Harpoon Brewery) and a former Board Chair of Associated Industries of Massachusetts.
The crowd was unusually quiet and well-behaved for a Harpoon company meeting.
It was a Wednesday afternoon in July 2014 in our Seaport Beer Hall. The taps were open only a few feet away. All two hundred or so of our employees were gathered together for a special meeting. Most thought it was to discuss priorities for the second half of the year.
A few noticed some unknown visitors standing on the other side of the bar. Somewhat concerning was that several of them had on suits, a rare sight at the brewery. Whispers started that maybe this was a more important meeting than usual.
Would Mass. Bay, holder of brewing license 001 from the Commonwealth of Massachusetts, be going the way of so many other craft breweries and announcing a sale to a large brewer or private equity firm?
After some introductory remarks I got to the point of the meeting which was to introduce the new owners of a 48 percent stake in our brewery. At his point you could hear a pin drop.
I asked everyone to turn to the person next to them and shake hands since they were all now owners of our company. After a second or two of quiet disbelief, the Beer Hall erupted into cheers and applause – and a few tears of relief and joy.
Jobs were secure. Ownership was settled. And the people who had helped me build one of the largest craft breweries in the country were going to share in the future financial success of our business. Check out this video for a recent take on what this means to our employees.
Employee stock ownership plans (“ESOPs”) have a marketing problem. Lots of misconceptions or half-truths circulate in the business world about the pitfalls or drawbacks of employee ownership. Like all good things in life, ESOPs come with strings attached. But the benefits to all parties involved – and to society at large – are potentially enormous.
The benefits for employees are more obvious, but I want to focus here on the benefits for company owners and economic policy makers.
For owners, if you decide to sell your company to your employees through an ESOP:
For political leaders and economic development officials, imagine what it would look like if many of the businesses in Massachusetts were owned by their employees:
So why aren’t there more ESOPs? As I said, we have a marketing problem. With the “gray wave” of Baby Boomer-owned companies coming up for sale over the next decade, we have the opportunity – and responsibility – to encourage good decisions by business owners and public officials.
For more information, please join me for a panel discussion Is an ESOP Right for your Business? at noon on December 2. For more details, click here.
*Some material in this article was taken from the Guide to Employee Ownership prepared by the National Center for Employee Ownership (www.nceo.org).