Give the Hired Worker His Wages and Stock, Too

Last updated on: May 12, 2016 at 4:07 pm by Rob Moll

Give the Hired Worker His Wages and Stock, Too 2016-05-12T16:07:38-05:00 Rob Moll

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by Rob Moll

Upstart yogurt company Chobani made news recently when its owner Hamdi Ulukaya granted his 2,000 employees a 10 percent stake in the company. That made some long-term employees millionaires. But everyone benefitted as the $3 billion company granted an average gift of $150,000 per employee. As the company grows, the value of of that gift could appreciate significantly.

It is easy to recognize Mr. Ulukaya’s gift as unusually generous, but for a lot of reasons it makes business sense as well as having a biblical justification.

In the tech industry, early ownership in newly founded companies can attract bright young minds, eager to work hard and able to trade in a portion of their salary for stock. That’s helped to create a culture in which workers are owners so that even large, established companies like Apple or Amazon provide generous stock options to employees. In the food industry, however, where most employees are working in factories the business reasons for ownership seem less obvious. “It’s very uncommon and rare, especially in this industry, for these kinds of programs to be rolled out,” one human resources analyst told The New York Times.

One of the biggest problems a company in any industry faces is the division between senior management, who are often compensated with ownership, and the rest of the employees. These days, that division is worsened by senior leaders who earn hundreds of times what the average salaried worker earns.

Leadership is hard, but the job of keeping a company aligned in cultural, processes, goals, and other key areas is much, much harder when employees are suspicious of their leadership. Lack of trust destroys the ability of a CEO to do her job well.

It also produces the more day to day problem of “silos.” One department fails to work well with another. One team hides information from another. One staff member doesn’t consider the needs and concerns of a colleague. Often, these are rational decisions based on the conflicting incentives given by management. Those incentives are more aligned when everyone has a stake in the shared success of the company.

Shared ownership, like Chobani, has the advantage of reminding everyone that their interest and goals are the same—no matter a person’s department or leadership level. If the company as a whole does well, so does each person. An employee stock option plan won’t fix the “silo mentality” or leadership divide all by itself, but it helps point out those conflicts and keep everyone working toward the success of the whole enterprise.

Giving ownership to your business’s workers is also, as Eventide’s Faith and Business Director Tim Weinhold argues, a very biblical approach. In his piece, which deserves a read, “The Wisdom of Shared Rewards,” my colleague Weinhold argues that in the Old Testament God’s economic arrangement gave everyone in Israel the same kind of financial stake in the economy by ensuring land ownership for every family.

Agriculture was the predominant business engine — the primary means of wealth creation — in the ancient world (and still is in substantial portions of the modern world). As a result, land ownership meant (and still means) having an upside stake in the means of economic production. It meant the difference between being merely a laborer versus being a worker/owner…

Translated into modern economic conditions, God made clear the importance of employees having ownership stakes in the enterprises for which they work.

Going further, Weinhold says that through the command not to muzzle the ox while treading out the grain God is communicating his “foundational principle for every business owner: All those who contribute to business success should share in its rewards.”

Sharing ownership, like Mr. Ulukaya has done, sure seems extremely generous, in an era where workers receive barely a penny for every dollar paid to the CEO. But God’s plan to give everyone a stake in the economic engine and to ensure that even non-human workers are generously rewarded makes even the generosity of Mr. Ulukaya seem perhaps a bit miserly. Any organization requires leadership if it is to function well. But it also requires the hard work of the “oxen” who tread out the grain day after day.

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