Salinas Valley Grower Launches ESOP
Tanimura & Antle has become the largest agricultural company in Monterey County to share ownership with its employees.
The company's sale of equity to create the Employee Stock Ownership Plan was finalized on Feb. 10 and it will allow the company to offer shares as retirement plans for workers at all levels, officials said.
Rick Antle, Tanimura & Antle's chief executive officer, said he was not at liberty to discuss what percentage of the company would be owned by employees or the size of the transaction. But Brandt Brereton of the investment bank that handled the transaction, Brereton, Hanley & Co., characterized the plan as "one of the largest in the U.S."
Antle said the plan was created to position the company for growth with stability through local control as opposed to control by outside investors.
"We've always looked at our workforce as being a key part of the organization, our number one asset," Antle said. "As we looked at the future generation, we looked at different options and the one that most resonated with us was the Employee Stock Ownership Plan."
Employee Stock Ownership Plans can give existing generations of shareholders access to capital when company leaders want to retain control of the company and perpetuate the independence of the business, Brereton said in an email. It's in line with "shared capitalism," a recently coined concept that pushes forward the notion that employee ownership is in keeping with the economic vision of the United States' founders.
"This idea of 'selling in' rather than 'selling out' is generally much better for workers as traditional mergers and acquisitions (selling out) often can lead to employee layoffs," Brereton said.
Tanimura & Antle employees at all levels — from harvesters to supervisors — will be able to buy into the stock plan as long they are at least 18 years old, U.S. residents and have worked for the company at least 1,000 hours.
"Those are the criteria established through the federal program adopted in the 1970s by the federal government," Antle said, referring to the type of retirement plan established by the Internal Revenue Service in 1974.
The agricultural industry has suffered from labor shortages in the past few years, and the ESOP is another incentive to reward skilled workers and inspire their loyalty — just like it was building worker housing, Antle said.
"In 2015 we had a labor shortage, in 2016 we were fully staffed," he said. "We expect this will not only attract but retain a skilled workforce. We're forward-thinking, it's not just today but the future (of the employees) as they look at their retirement years."
The only other open ground farming-related company that is ESOP-owned is Porterville Citrus, which is the packer/shipper for the Sunkist label, Brereton said.
According to the National Center for Employee Ownership, there are about 6,700 employee stock plans in the United States, with about 14 million workers participating in them.
Tanimura & Antle employs about 2,500 in its Salinas plant and a total of 7,000 people when including workers who operate seasonally both in California and Arizona. Antle said he hoped the retirement plan would be an added incentive for workers to travel to Yuma during the Salinas off-season.
As seen in the Monteray Herald.