The Inbox – An Unexpected Treat
As employees of the New York-based Chobani yogurt plant filed into work last Tuesday, they were met with sealed, white envelopes containing a sweet financial surprise.
Little did they know, the owner and CEO, Hamdi Ulukaya, had been working with the human resources consulting firm, Mercer, to hatch a plan to transfer 10 percent of his stock in the company to roughly 2,000 full-time employees.
Employees were given an allocation of stock based on their tenure with the company. If or when Chobani is acquired or goes public, newer employees might receive a cash payout around $150,000 while veterans of the company might see a seven figure payout. As The New York Times reported, Mr. Ulukaya, who founded the company a decade ago, views the stock transfer as an acknowledgement of the hard work and loyalty of his workforce. “I’ve built something I never thought would be such a success, but I cannot think of Chobani being built without all these people.”
While Chobani’s workers have helped build a company with an estimated value between $3 billion and $5 billion, other parties have certainly played a role in its current state of health and wealth.
TPG Capital loaned Chobani $750 million two years ago when Chobani suffered financial and regulatory setbacks related to the construction and operation of the world’s largest yogurt processing plant situated in Idaho. The bailout money allowed the Idaho plant to recover and start profiting from the introduction of new products to the market.
As part of the deal, TPG acquired warrants to buy 20 percent of the company’s stock. As of April 26, however, and before TPG could act on those warrants, that percentage was diluted by the 10 percent employee allocation. The New York Times added some intrigue to the story when it reported that tension emerged between Mr. Ulukaya and TPG after the loan deal and that rumors have circulated over TPG’s alleged desire to replace Mr. Ulukaya with a new chief.
We will watch the story as it develops, and in the meantime, perhaps give the Chobani employees a virtual high-five. They appear to be the big winners this week.