Once Again Nut Butter is 100% employee owned. We are an Employee Stock Ownership Plan (ESOP), however, we govern ourselves as a worker-owned cooperative. The biggest difference between a worker co-op and an ESOP is in the valuation of company stock. In an employee-owned company, all the employees are owners. Democratically managed: We come together in company meetings and everyone has a vote on how the company is managed. Our company meetings are held to address: company policies, operational issues, and financial strategies. Committees are also formed to help resolve issues, which are subject to a final company vote (1 person = 1 vote). We have at least 3 employee owners sit on our Board of Directors. Fair Compensation: The income that is generated in our business is distributed fairly. For example, a 3.5:1 compensation ratio of highest to lowest paid employees. Profit sharing bonuses are distributed equally to all owners. Integrity: We are not hierarchical in our structure. The supply chain is flatter and streamlined in the way that commodities are grown, purchased and distributed. Products are produced with a higher level of integrity because the employee shares ownership and they take pride in what they are producing. Fair Trade: Our employee-owned company cares a great deal that our growers make a fair wage and we engage in fair trade practices. We start co-ops in developing countries helping to address issues of economic crisis and poverty. We also engage in domestic fair trade practices supporting small and rural farms and bee keepers making sure they receive a fair price for crops.
An Employee Stock Ownership Plan (ESOP) is an employee benefit plan which makes the employees of a company owners of stock in that company. An ESOP provides employees with a stake in the ownership of their employing corporation.
A company which wants to set up an ESOP creates a trust to which it makes annual contributions. These contributions are allocated to individual employee accounts within the trust. A number of different formulas may be used for allocation. The most common is allocation in proportion to compensation, but formulas allocating stock according to years of service, some combination of compensation and years of service, and equally, have all been used. Typically employees might join the plan and begin receiving allocations after completing one year of service with the company, where any year in which an employee works at least 1000 hours is counted as a year of service.
The shares of company stock and other plan assets allocated to employees' accounts must vest before employees are entitled to receive them. Vesting is a process whereby employees become entitled to an increasing percentage of their accounts over time. The least liberal vesting schedule allowed by law 20% per year until employees are fully vested after 6 years of service. Some companies, however, vest employees entire accounts right away.
When an ESOP employee who has at least ten years of participation in the ESOP reaches age 55, he or she must be given the option of diversifying his/her ESOP account up to 25% of the value. This option continues until age sixty, at which time the employee has a one-time option to diversify up to 50% of his/her account. This requirement is applicable to ESOP shares allocated to employee's accounts after December 31, 1986.
Employees receive the vested portion of their accounts at either termination, disability, death, or retirement. These distributions may be made in a lump sum or in installments over a period of years. If employees become disabled or die, they or their beneficiaries receive the vested portion of their ESOP accounts right away.