Our “ESOP Podcast Summer School” series continues. We’ve selected highlights from our archives featuring employee-owners that we’ll re-release all summer. (Because these episodes are from the archives, please remember that the links and email addresses mentioned in the podcast may no longer be valid.) As you enjoy summer school, we are working hard behind-the-scenes to bring you new content and services that are better than ever, starting in the fall of ‘19!
Our featured guest is Ken Baker, CEO of NewAge Industries in Southampton, PA, and co-founder with Dan Adley of the Pennsylvania Center for Employee Ownership (PaCEO).
In this informative interview, we learn how NewAge Industries grew from the dream of founder Raymond Baker into a 45 million dollar operation and a 49% employee-owned company. He then describes why his succession plan is for the employees to ultimately assume 100% ownership to continue the firm's success and Raymond Baker's legacy.
Ken Baker educates others about ESOPs, through the training he conducts in his own company, and by sharing best practices with other companies in the state of Pennsylvania via the PaCEO. He feels that ESOPs address a range of issues – the wealth gap, retirement savings, retention, and employee engagement. ESOPs also raise the wealth of the American worker. When employees have financial stability, they perform better in the workplace. A strong ESOP community benefits all ESOP companies, not just one, as well as society as a whole.
"NewAge Industries established its ESOP – Employee Stock Ownership Plan – in January 2006, when CEO Ken Baker sold 30% of the company to the employees as a way to ensure the company's continuation.
The ESOP added a new facet to the company's culture, namely the pride of ownership, while it discouraged a buyout from a competitor or other business. It's another feature of the company's retirement benefits that include a pension plan and 401(k) plan.
In January of 2013, Baker sold an additional 10% to the employees, bringing employee ownership to a 40% share. ESOP ownership was increased to 49% in 2016, and in 2019 NewAge will become 100% employee owned.
Since the inception of the ESOP, NewAge has continued to grow and prosper. Demand for its high purity products, marketed under the AdvantaPure® name, has experienced tremendous growth, and its standard products have also seen a substantial increase in sales. This success and the satisfaction of employee ownership has a real and beneficial effect on the morale, attitude, and future retirement of NewAge Industries' employee-owners.
NewAge built its solid reputation by providing a high level of customer support and service, along with superior products, and the AdvantaPure division has earned a similar standing. The establishment of the ESOP lets employees expand upon that by allowing them to take true ownership of their positions. Baker says "When a customer calls, they speak with an owner. The employees' jobs are part of an investment in their future, and that's reflected in their communications with customers and suppliers, and with each other, now more than ever."
Another customer benefit resulting from the ESOP is that it sets up a succession plan for the organization. Many of today's international conglomerates become larger by acquiring small companies. Plants are often closed, and production is moved offshore. The knowledge and talent of those employees is lost as they find jobs in other industries. Baker wanted to avoid that possibility and, at the same time, help secure a future for NewAge, AdvantaPure, and its employees." [Source: NewAge Industries, We Are Employee Owned!]
You can hear the original January 9th, 2018 release of this episode in full in "Episode 16" of The ESOP Podcast.