Acton Institute Powerblog

Chobani’s CEO on the Art of Executive Stewardship

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As politicians continue to decry the supposed “greed” of well-paid investors, business leaders, and entrepreneurs — promoting a variety of reforms that seek to mandate minimums or cap executive pay — one company is demonstrating the value of economic freedom and market diversity.

Chobani, a privately owned greek yogurt manufacturer, recently announced it will be giving a 10% ownership stake to its roughly 2,000 full-time workers, a move that could result in hundreds of thousands, if not millions, of dollars for some employees.

According to the New York Times:

Hamdi Ulukaya, the Turkish immigrant who founded Chobani in 2005, told workers at the company’s plant here in upstate New York that he would be giving them shares worth up to 10 percent of the company when it goes public or is sold.

The goal, he said, is to pass along the wealth they have helped build in the decade since the company started. Chobani is now widely considered to be worth several billion dollars.

NBC News has the full story:

The reporter describes the move as “more Silicon Valley than Upstate New York,” and indeed, one doesn’t typically associate these sorts of stock options with lower-level manufacturing workers.

For Ulukaya, however, it’s another way of recognizing the service providing by his employees. “This isn’t a gift,” he wrote in a letter to his employees. “It’s a mutual promise to work together with a shared purpose and responsibility.”

“It’s better than a bonus or a raise,” says Rich Lake, a lead project manager at the company. “It’s the best thing because you’re getting a piece of this thing you helped build.”

Whether the move pays off for Chobani is yet to be seen, but the positive response from those on the ground demonstrates how the task of bridging work and wage can be tackled a variety of ways, whether through material benefits (bonuses, increased salaries, ownership), special perks, or other task- and/or relationship-related tweaks.

In more than one case, Chobani’s employees express a preference for ownership over straight-up cash, despite increased risk. Yet our conversations at the level of policymaking continue to impose cutter solutions on what businesses should or shouldn’t be offering to their workers and at what price. If wages were manipulated to be excessively high, for example, would Chobani even think or have capacity to offer such a program?

The ideal approach and outcome will be different for each employer and employee, which is entirely the point. Ulukaya made a business decision based on conscience, and it is here, not the government’s billy club, that work and wage should meet.

As Lester DeKoster writes:

 [Executives] have the awesome obligation of setting wage and price scales for employees and products. Theirs is the gift for merging all economic variables into price tags and wage rates—and their choices are as sculpting of their own selves as any others. Conscience sets before these executive stewards an ideal free-economy goal of (1) the best product; (2) produced under the best working conditions for all employees, including themselves; (3) at the best wage for everyone involved; and (4) reflecting the best efforts at every job, to be sold at the lowest price compatible with these requirements.

The twin tracks of work and wage do not meet, and cannot be scientifically related. They are bridged by morality, not by mathematics. And it is in the self-sculpting choices of wage and price scales that managers must make the twin tracks merge — under the all-seeing eye of God. It is here that justice, as defined by the will of the Creator and revealed in his Word, comes to bear upon the economy.

As we look to how our laws and policies might hinder or enhance this role, we should note that good economic artistry requires the capacity to cultivate and act on one’s conscience, and that means having the imagination to allow for some brush strokes.

Joseph Sunde is an associate editor and writer for the Acton Institute. His work has appeared in venues such as The Federalist, First Things, The City, The Christian Post, The Stream, Charisma News, Juicy Ecumenism, Ethika Politika, Made to Flourish, and the Center for Faith and Work. Joseph resides in Minneapolis, Minnesota with his wife and four children.

Comments

  • Quite a few companies have done something like this. Many companies have done profit sharing for decades, which is close to the same.