On Jan. 7, NOW Health Group (Bloomingdale, IL) announced its plan to preserve local ownership and further strengthen the company’s prospects by selling a portion of its stock to employees through a new Employee Stock Ownership Plan (ESOP).
An ESOP is a form of federally regulated retirement plan that is designed to invest primarily in the shares of the parent company. Employees who meet broad eligibility requirements will receive shares of the company stock over time and will receive the cash value of the shares upon retirement or departure from the company. There are approximately 7,000 ESOPs in the United States.
Like most other companies, NOW will fund its ESOP through corporate earnings—individuals are not investing their own money.
“We realized several years ago that we would eventually need a plan to transfer the ownership and management of the business to the next generation, or we would risk seeing our business either sold or possibly fail,” said NOW CEO Jim Emme. “We receive numerous calls to sell our company, but we have worked too long and too hard to build this business, and that was not an acceptable option. We’ve done very well by this business, and we want our workforce and the communities that have supported us all these years to continue to do well by us with a promising future.”
According to Emme, the company will be owned by a combination of family members and the employees at large. Through the ESOP, employees are expected to own about 30 percent of the company. NOW also has several initiatives in place and plans a strong communication effort to explain the new ownership changes to employees and their families.
“Ownership succession was the missing link in our otherwise successful business growth plans. We really needed a transition plan that worked for everyone—the Richard family, the management team, the employees, the community, and, of course, for our customers,” Emme said. “This outcome allows us to continue moving forward strongly based on the core values that have always guided our business—transparency, clear communication, community, and business success built by our employees.”
For more information, visit www.nowfoods.com.
