Bob Moore, 93, goes to work every day doing what he describes as his dream job, running Bob’s Red Mill, the Oregon-based whole-grain foods manufacturer he founded with his wife in 1978. But having a nonagenarian president isn’t the only thing that makes Bob’s Red Mill a special place to work. As of April 2020, the company is 100% employee-owned.
Employee Stock Ownership Plans give employees shares of the company, allowing them to directly benefit from its success. Proponents of ESOPs argue they can lead to increased productivity and company loyalty, and according to the Department of Labor, employees at ESOP companies are less likely to be laid off as non-plan participants.
Despite the clear benefits to employees, ESOPs remain rare. Other companies operating an ESOP include Publix Supermarkets, King Arthur Flour, Taylor Guitars, and HyVee. Moore argues the list of American employee-owned businesses is short because executives are too focused on their personal finances.
“Companies could do this, but because money is the only factor, and the owners and managers are generally looking out only for their own benefit, and what company can do for them, I’m not so sure everyone cares to do that,” he says. “Come in, get as rich as you can, get out — that’s their main idea.”
Moore says he’s built his life around trying to avoid that approach. The ESOP has been integral to that commitment. Working for an employee-owned company can change workers’ lives and give them a reliable way to provide for their families, he says.
Embracing an ESOP as a succession plan
Bob’s Red Mill was successful almost as soon as they opened their doors. “Whole grains were pretty hot,” Moore jokes. It wasn’t long before Moore had 20 employees, then 40, then he had to rent a warehouse across the street, then he was distributing products to regional grocery stores. It just kept growing, he says.
Around 1983, when Bob’s Red Mill was just taking off, some of the employees approached him about buying into the business. Moore devised a profit-sharing plan based on how long each employee had been with the company and their wage level. He began giving workers a share of the company’s profit monthly, in a separate check, when profits justified it.
At first, Bob’s Red Mill was able to send out profit-sharing checks a few times a year, but as the company turned bigger profits, employees received more and more checks. By around 1990, Moore was able to issue montly profit-sharing checks to employees who have been with the company for a year or longer.
Around, as Moore and his closest business partners thought they were nearing retirement age, they knew they needed a transition plan. It was the age of consolidation, and Moore received countless calls about selling the business, but he didn’t want to go that route.
“Businesspeople continually reach out to me, interested in buying my company, like they’re doing me a great favor,” Moore says. “They say they’re going to take it off my hands and give me a lot of money. They’re so enamored with themselves that it became difficult to even answer my phone. They thought I was just a lame-brained idiot because I didn’t want to sell my company. They told me how stupid I was, but you can’t build what I’ve built and be really stupid.”
Moore’s financial partner John Wagner began reading up on ESOPs and attending seminars as an alternative. After several years of deliberation, Wagner and Moore agreed an ESOP would be Bob’s Red Mill’s best bet for achieving long-term success.
The ESOP papers were signed in 2010 on Moore’s 81st birthday, giving the employees one-third of the company.
Perhaps unsurprisingly, Moore’s commitment to his workers has meant the company has been nearly immune to the Great Resignation though there’s been some struggle to find new workers as the business has continued to grow.
“I learned almost 70 years ago how integral hard work and kindness is to success,” Moore says. “As our small business grew, I realized I had a great opportunity for generosity. My favorite bible scripture, Matthew 7:12, says do unto others what you’d want them to do unto you. That’s something I think we should all live by.”
Above all else, he says, Bob’s Red Mill employees are valued and informed. He shares company information with them before they opt in as owners. “There’s a lot of open dialogue, and we do town halls, so employees feel free to contribute their own ideas,” he says. “And if they have a problem, they can raise that, and we can commend them for the job they’re doing.”
This approach, Moore says, is not being taught in business school, “but it should be.”
“I’ve traveled all over the world. I have a lovely home. I’ve been successful. I haven’t squandered my money,” he says. “It’s a wonderful pleasure to have enough to do these things, but here’s the thing: you need to have a purpose.”
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