There were no Maseratis in the parking lot, at least not yet, but there was plenty of excitement as H-E-B partners gathered at the McCreless store on the south side to celebrate the firm’s surprise grant of non voting stock to 55,000 partners, News Radio 1200 WOAI reports.
The company will then make yearly contributions to the stock plan based on its performance.
The shares amount to 15 percent of the privately held company’s stock.
The Butt family, who founded and own H-E-B, will still remain as the primary owners of the company. Employees will be automatically enrolled in the stock program, which is separate from a 401(k) plan that includes a company match. H-E-B anticipates employees will over time will own about 15 percent of the company.
Butt praised the Partners for enabling H-E-B to expand aggressively while still maintaining profitability, something he said few corporations have been able to achieve.
The Butt family’s enlightened approach to doing business certainly hasn’t hurt the bottom line: H-E-B had $221 million in annual sales when Charles Butt took over 44 years ago; with 370 stores today – 318 in Texas, 52 in Mexico – its sales top $23 billion. Originally a neighborhood grocery in Kerrville founded by Florence Butt in 1905, the company now headed by her grandson has always been one of the most enlightened in the state.
In January, the eligible workers will receive stock valued at 3 percent of their salary, plus an additional $100 in stock value for each year of continuous service completed by the end of 2015. Under the arrangement, laborers have the capacity to cash out when they leave or resign from the organization, and will likewise get profits of the retailer’s income.
When he told the gathering of 1,800 that “55,000 will be stockholders in H-E-B”, there was a moment of silence before his next words were drowned out by applause and the clanging of cowbells that had been handed out as part of the anniversary celebration. Her youngest son, Howard Edward Butt, led the company’s early period, and the company’s name reflects his initials. Howard Butt III has led the development of the 52-store Supermercados Internacionales H-E-B division in Mexico, headquartered in Monterrey.
Butt is ranked third on employer rating site, Glassdoor’s Highest Rated CEOs list in 2015 and H-E-B ranked seventh on Glassdoor’s Employees’ Choice Awards for 2015.
The company’s 9,000 employees in Mexico also aren’t eligible for the plan because of the constraints of the USA law.
Regardless of form, the ESOP structure tends to deliver significant benefits for employees and companies alike.