On July 10th Harpoon Brewery CEO Dan Kenary announced that “Harpoon Is Now An Employee-Owned Company!” The local brewery’s ESOP (Employee Stock Ownership Plan) went into full effect on August 1st, officially making its employees more than just workers.
In a recent interview with DigBoston, Kenary revealed that he had been looking into the possibility of creating an ESOP since 2012. In the meantime, co-founder and former CEO Rich Doyle explored other options – including selling the company or bringing in big investors.
In the end, Kenary and Doyle chose to keep Harpoon independent and local to maintain its commitment to “brewing great beer and sharing unforgettable beer drinking experiences.” Kenary told Doyle at the time, “[this is] what feels right to me.”
The ESOP transfers 48% of company ownership to the employees, in what Kenary characterizes as the ownership group “giving them the shares [instead of] leveraging up the business and taking dividends out just to make a few people rich.” ESOPs, though complicated, essentially function as “a kind of employee benefit plan, similar in some ways to a profit-sharing plan.”
“In an ESOP, a company sets up a trust fund, into which it contributes new shares of its own stock or cash to buy existing shares. Alternatively, the ESOP can borrow money to buy new or existing shares, with the company making cash contributions to the plan to enable it to repay the loan. Regardless of how the plan acquires stock, company contributions to the trust are tax-deductible, within certain limits.”
Harpoon, founded in 1986, paved the way for other craft brewers at a time when the industry was almost non-existent. Now it’s the 12th largest craft brewery in the nation.
With this move towards employee ownership, maybe Harpoon can once again influence other companies to do business differently. As the Dig notes, Market Basket could learn a thing or two.
For the full interview, click here.