During a party this weekend, the leaders of the Hi Nabar supermarket told the workers they sold the company, not to the outside owner, but to the workers.
Hi Nabar Supermarket is jointly owned by nine siblings of the Griffith family. But that changed in late March, when the company sold itself to an employee shareholder program. The sale runs until January 2020.
“We told them we were selling the store first, and then we sold it to them, and they were very excited about it,” said Jim Grifface, president of Hi Nabor. “We plan to make sure to shift this to people who are moving the business forward, which will continue to be the name of Hi Nabor.”
Hi Nabor hopes to begin construction in 2018 on a new grocery store at the intersection of La16 and Magnolia Beach Road in Denham Springs.
At first, the staff was shocked, he said. Even a day after the announcement, workers’ attitudes have changed.
“This is their shop now,” he said. “They’re excited about it.”
Griffith said he was skeptical of the idea, which was suggested by a local follow-up planning expert.
“When I first heard about it, I thought it was a crazy idea, but when you ask it, you realize it’s the right plan for us. Not just for the family, but for our staff,” he said.
The employee shareholder plan controls 100% Hi Napor. As the move backfired, it enabled the company to advance funding benefits for eligible employees. The employee-owned plan is a pension compensation tool for workers, in addition to the 401K plan. Each year, shares are allocated on the basis of salary to eligible employees who are at least 18 years old and have worked 1,000 hours. Only when taxes are taken out, when the pension is taken by the employer.
The company can save money on taxes and use it to invest in workers and infrastructure. Companies owned by employees who use equity plans do not pay federal income tax because it is called a ‘pass through’ company.
“It helps us facilitate expansion,” Griffith said of the restructuring and lack of taxation. “All that money goes back into business.”
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Appleton, a Wisconsin-based ESOP partner, is a third-party administrator for a supermarket employee-owned project. The project is overseen by a trustee Dominic Acresta, who represents the staff and then votes on the board of directors he proposes.
Key decisions such as store opening will be made by the current management and a five-member board of directors.
Hi Nabor was founded in 1963 by brothers Sam and Francis Griffiths on a 5,000-square-foot location on Winborn Avenue in North Baden-Rouge.
Since then, that primary store has grown to 30,000 square feet. The second store on Jones Creek Road opened in the 1980s and opened in 2014 as a relocation of its Florida Boulevard location to its Truzilla shopping center location. Hi Nabor now has 250 employees at three locations, and could add dozens when the Denham Springs store opens. The company is sorting out details around local wetlands.
In 2014, Sam Griffiths died of cancer. Francis Griffiths died in January 2020.
Most Griffith children are still active in the daily activities of business. But as they look to retire and leave the company, the new structure helps make them smoother.
Family members get shares based on compensation just like everyone else.
Jim Grifface, now 66, has been working in the supermarket since he was 15 and has been there for five decades. He expects to continue working in the store for at least another 10 years.
The company is leading the corona virus epidemic as it opens up as an essential business. That means motivating employees by paying time and half of the regular working hours between March and July 2020, so costs were high even though business was bustling. The new ownership system makes the company more competitive for talent, Griffy said. It costs nothing for workers to participate and the owner’s shares depend on the employee’s salary.
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There are thousands of employee equity program companies across the country and dozens in Louisiana.
Lakeland, based in Florida with nearly 200,000 workers, is the largest employee-owned business in the country. Other supermarkets such as Lufkin in Springdale, Arkansas, Brookshire Brothers in Texas and Harps Foods are employees owned by the same structure. Agadian, an ambulance provider in Lafayette, was hired by Baton Rouge-based John H. Snyder in the 1990s. Carter and were transformed into an employee-owned business, just as automation and control specialists did.
According to ESOP partners, the average participant in an employee shareholder plan in the United States has 9 129,521 in their accounts. Most projects date back to the 1990s.
“Employee ownership transforms businesses by creating a permanent owner,” said Jason Wellman, director of ESOP Partners ’Ownership Culture. “We have this Friday Tsunami, where many older people who want to retire after COVID will be able to sell without a buyer and gain a fair market value for your business. Will become wealth. ”