Airplanes are big complex systems, so I get that, but yogurt?
Edit: Apparently I rubbed some folks the wrong way. I didn't mean to think I could do better, I just meant it's a wild thought that something so "simple" as yogurt could require so many people to make.
You guys probably know about "I, Pencil", but it's a good read if you haven't heard of it: http://www.econlib.org/library/Essays/rdPncl1.html
I wonder if it's a bubble or whether they can compete. It doesn't taste much different to the existing products, and costs more.
And how many employees would it take to distribute, market, package, ship, sell, QC, etc?
(By contrast Proctor and Gamble has about 110,000 employees.)
You asked an admittedly ignorant question, but it was somewhat interesting. It's a nice reminder that most of our economy still does depend heavily on the labor of many humans.
I would love to see a breakdown for their employees and what their roles are spread throughout the company. Also how many manufacturing locations they have (I thought it was just one).
[1] http://www.foodbusinessnews.net/articles/news_home/Business_...
Thats what working capital is for.
In any event, I wasn't maligning Chobani, just expressing my surprise.
This story reminds me tangentially of the time when Hewlett and Packard, when faced with a downturn at HP, decided to cut pay across the board so the company could avoid layoffs. Once HP recovered, I'm assuming they reinstated previous salary levels and then some. HP then benefited from a highly committed and skilled workforce who deeply respected their leaders and company.
Unfortunately, these stories reflect the (very rare) exception and not the rule. Today, we're much more likely to see CEOs and executive teams earning (multiple) millions in salary and options, all the while they are outsourcing jobs, implementing layoffs, converting full-time jobs to contract and part-time jobs, and so on. These CEOs are extracting as much wealth as they can, at the expense of their employees.
We desperately need more ethical, bold leaders like Ulukaya, Hewlett, and Packard who are going to shape the future of business; a future that is kinder, compassionate, and community-minded.
It mystifies me that cutting pay instead of getting rid of deadweight is seen as noble or honorable.
If I were working at HP, I would have quit the second they decided to cut my pay just so they could avoid needed firings.
I sympathize with your viewpoint, but I think it depends on whether you see dead weight. If you are on a great team with no dead weight, a pay cut to keep everyone together would be far more palatable.
Ditto for GM when they offered all union employees the same (formula for) buyout from their contracts -- the best ones take it and leave because they'd get the money and the new job; the poor performers know they can't last anywhere else and stay on.
Hell, for that matter, why do you assume that you wouldn't have been among those deemed "dead weight" and laid off?
From an ethical point of view, outsourcing is great. It provides jobs for people in poor countries.
I disagree. Even in today's global economy, the country in which a business is based seems to have a significant effect on its prospects. In 2014, 19% of US households with children were food insecure , and 46.8 million people were in poverty [1]. Given the widespread poverty right here in the US, is it ethical for US companies - that benefit to at least some degree from being based in the US - to export jobs to other countries?
[1] http://www.feedingamerica.org/hunger-in-america/impact-of-hu...
Where is the mass employee outrage and "voting with our feet" for the wage suppression some of our largest employers supported? We can all have high minded ideals but at the end of the day our options are often VERY limited, as few would willingly take a massive pay cut for their ideals, especially given the inherent commons problem in that many people would need to do so simultaneously for the powers that be to "Feel" it.
How do we actively motivate this change when most of the power and incentive dynamics are _not_ in the employee's favor? (I mean this as an honest question, I don't see any easy answers)
The turnaround is a nice reminder that running a business sometimes requires ignoring the people whose job is to second guess and critique your every move.
No way this happened.
I wonder how they set this up tax-wise. Stock grants are income, even before you sell. In tech companies, you typically get the stock when it's super cheap, so the tax hit is minimal. But here, since the value's pretty firmly established, the employee is potentially on the hook for quite a bit. And depending on the details of the grant, it may not be possible for employees to sell off their stock to pay taxes.
There are several ways to solve this. The employees could be getting options (set up so taxes are deferred until they exercise). Or the company could just eat the tax themselves. But kind of curious which route they took.
Just to be clear, RSUs are taxable as income at the value & tax year they vest, not the grant date.
How did that happen? How would the 10 percent given to the employees not be included in the 20% of the TPG contract?
From TFA: "He said that giving his employees a stake in the company’s success was among the terms he demanded when the deal with TPG was struck."
At least that's my impression of employee owned businesses, it seems like a smart economic move.
As a thought experiment, I wonder what might go well or poorly in this case?
The publicity is great. Employee loyalty from gratitude and vesting. It may afford a near-term competitive advantage from capabilities like increased willingness to work overtime or rallying together during an opportunity/crisis. Real information may flow more freely as employees feel a safety/pride of ownership and connection to management.
How will new employees feel about working alongside someone with much greater compensation? Existing employees may immediately face this - since shares were dolled out by tenure, employees with several years' tenure may see themselves as rich vs. newer folks and vice versa.
As vesting completes, experienced employees may depart as they become financially independent. Or perhaps the windfall will inspire lifetime loyalty.
Will there be problems at competitors, whose employees are marginally less satisfied, knowing their counterparts at Chobani are treated so well?
Overall an inspiring and kind program. I'm excited to see it play out.
Profit sharing and employee ownership aren't really new concepts. Lots of different companies have been providing such opportunities for a long time, especially for senior employees, so it's unlikely to be controversial.
Here is some background information - don't grt me wrong the move is great but as any great move there are a few more implications:
1) tpg loaned 750mn to bail out idaho plant to Ulukaya.
2) as part of the deal tpg has warrants against hamdi's own stock.
3) tpg try to oust hamdi once, the gidt cements his role as a ceo as employee love and support to him is boosted.
4) tpg's warrants are diluted since hamdi gave out 10% of his own stock. Essentially now the options can address 90% of hamdi's stock.
AGain a great chess move.
Your move tpg.
Edir: typos due to mobile.
