THE BULLETIN • SUNDAY, FEBRUARY 14, 2021 C7
ESOPs
Continued from C1
Just how much profit gets
shifted into shares varies by
company, but in the case of
WinCo, an equivalent of 20%
of an employee’s earnings are
placed into an ESOP account.
The funds are taken from prof-
its made by the company, not
the employee’s salary.
For example, if an employ-
ee-owner earns $35,000 in
wages in a year, WinCo adds
$7,000 worth of shares into the
employee’s ESOP account. As
the share price increases, that
can translate into big earnings
when the ESOP accounts are
cashed in, which occurs when
the employee leaves the com-
pany or retires.
Not everyone is eligible —
there is typically an age mini-
mum and also a required min-
imum of hours. In the case of
WinCo, workers must be 19
years old and work 500 hours
within six months of employ-
ment. At Newport Avenue
Market, it’s 21 years and 1,000
hours.
There is a bit of a learning
curve for the program, said
Erin Rankin, a spokesperson
for Deschutes Brewery, which
launched its ESOP in 2012.
“The plan is not very intu-
itive so initially, it took some
time to get all employees up to
speed on the details of the plan
and how this benefit impacts
each of them as individuals,”
said Rankin.
There’s another catch. The
ESOP “bonus” does not en-
tirely belong to the employee
to start — a percentage of the
funds are forfeited if an em-
ployee quits the job before they
are “fully vested.” In the case of
WinCo and Deschutes Brew-
ery, employees are 100% vested
after six years, meaning that
after six years they can keep
100% of their ESOP bonus.
“The stock grows in value
much like traditional stock,”
said Steve Corbin, store man-
ager of the WinCo in Bend.
“The more shares you have the
more of WinCo’s profits are
passed on to you.”
That’s a big incentive for
workers to keep their jobs,
greatly reducing employee
turnover and training costs.
“We see greater company
loyalty and experience lower
rates of staff turnover because
many of our employee-owners
feel invested in a career with
“So many people I know struggle to save for retirement.
There was a time I was the same. At WinCo, the worry is
removed, and it’s as easy as punching in and doing your job.”
Steve Corbin, store manager of the WinCo in Bend
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“The owners felt like it was only fair, to connect that culture
with the economics of ownership. It’s a way to share the
success of the brewery with employees and further develop
the ownership attitude where people share a greater
responsibility for the future of the company.”
Erin Rankin, a spokesperson for Deschutes Brewery
us,” said Don Leber, vice pres-
ident of advertising and mar-
keting with Bi-Mart.
In addition to company
shares that can be cashed out,
WinCo and most other em-
ployee-owned companies also
offer a 401k plan. For those
edging toward retirement, the
combination of the 401k plus
the ESOP account creates a
nice nest egg.
“So many people I know
struggle to save for retirement,”
said Corbin “There was a time
I was the same. At WinCo, the
worry is removed, and it’s as
easy as punching in and doing
your job.”
Standard benefits apply too.
Most ESOP companies have
competitive benefits packages
that include insurance, paid
holidays and vacation time,
tuition reimbursement, and
short-term disability.
That all sounds great for
workers, but what’s in it for the
business owners? Some compa-
nies, such as Deschutes Brew-
ery, say it’s just “the right thing
to do.”
“The owners felt like it was
only fair, to connect that cul-
ture with the economics of
ownership,” said Rankin. “It’s a
way to share the success of the
brewery with employees and
further develop the ownership
attitude where people share a
greater responsibility for the
future of the company.”
Roger Lee, executive direc-
tor of Economic Development
for Central Oregon, said when
business owners offer a por-
tion of their company for dis-
tribution to employees, there
can be advantageous tax and
liquidity implications.
“When the stock acquisition
for employees happens, these
are often leveraged with inter-
nal loans which repay owners
NYT CROSSWORD SOLUTION
and employees from profits,”
said Lee.
Other benefits for owners are
sometimes less easy to quantify.
But the general belief is that
workers who also own a piece
of the company are incentiv-
ized to do a better job and be
more dedicated to their trade.
“We think the influence of
employee-ownership creates
an atmosphere of service that
improves everyone’s perfor-
mance,” said Leber, from Bi-
Mart. “It may not be for ev-
eryone or every business, but
we stand behind the idea that
building a strong relationship
between employees and the
company pays dividends to ev-
eryone involved.”
Johnson from Newport Av-
enue Market said her workers
were always proud of their jobs
but after the company transi-
tioned to an employee-owner
model in 2015, that sense of
pride was elevated.
“They have the mindset that
is their company too. There is a
greater incentive to look sharp
and keep the business clean
because they know they have a
vested interest in the success of
the business,” said Johnson.
Most importantly, said John-
son, employee-ownership has
impacted the patrons who
visit the store, as well as the
employee-owners. The feel-
ing that more people are ben-
efiting from the success of the
store simply permeates a posi-
tive vibe.
“ESOP has been a really im-
portant thing for our commu-
nity,” said Johnson. “Multiple
generations of families have
worked here. To be able to take
care of our friends and neigh-
bors was the driving force be-
hind our decision.”
e e
Submitted
Becky and Larry Kierulff
Larry and Becky Kierulff
LAT CROSSWORD SOLUTION
Larry and Becky (Shuck)
Kierulff, of Bend, celebrated
their 50th wedding anniversary
Saturday but will hold a formal
celebration at a later date.
The couple were married
Feb. 13, 1971, at Calvary Pres-
byterian Church in Portland.
They have two children, Amy
(and Randy) James, of Bend,
and Kristoffer, of Austin, Texas;
three grandchildren.
Mr. Kierulff worked as a
meteorologist for the National
Weather Service for 34 years
before retiring in 2001. He en-
joys skiing, playing guitar and
his grandchildren’s activities.
Mrs. Kierulff was a pre-
school teacher before retiring
in 2000. She volunteers with
Volunteers in Medicine and
enjoys her grandchildren’s ac-
tivities.
They’ve lived in Bend 20
years.
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Reporter: 541-617-7818,
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Valentine
Continued from C1
What about taxes?
Here’s something that will
blow your socks off. Did you
know that we have had seven
periods of material tax rate in-
creases since the Great Depres-
sion, and they corresponded
with great returns for stocks?
It’s true. The average annual
stock market return during
these tax hike regimes was
18.9%, nearly twice the long-
term average return of stock of
10%.
I won’t go so far as suggest-
ing that higher taxes lifted stock
prices, nor will I equivocate
that stocks will do great during
a future period of tax hikes.
Making those cases fly in the
face of my prior point about
deriving conclusions from sam-
ple sets that are statistically in-
significant. But I think you can
safely say from the data that ris-
ing taxes do not hurt stocks.
So, if politics has little to do
with stock returns, why do so
many people assume the oppo-
site? I think it has everything
to do with conflating the idea
our preferred candidate will be
good for the nation and that
will be borne out in the market.
Conversely, we assume our ri-
We
hear
you.
val candidate will be bad: bad
for the nation, bad for inves-
tors.
As you might imagine, cli-
ents who thought President
Obama would cause stocks to
crash did not vote for him, and
the ones fretting about Presi-
dent Trump were not his sup-
porters.
Our biases shape our logic
and create a false sense of con-
nectivity between cause and
effect as highlighted by the pas-
sion behind our views during
this period of increasing polar-
ization.
There is plenty to be con-
cerned about as to the future
direction of stocks this year,
from pockets of frothy valua-
tions, to what the post-COVID
world looks like, to the impact
on the extraordinary money
creation over the last year.
That’s where my focus will be,
not on what’s happening in
Washington, D.C.
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