After nearly 25 years at the helm, the founders and owners of one of my favorite pizza joints are getting ready to retire. While they could sell the place, or shut it down, they’re taking an unusual step—setting up a trust that will secure the business, help fund their retirement, and help their employees plan for the future as well.
The New York Times reports on the Employee Stock Ownership Plan being set up by the owners of Oakland’s Zachary’s Chicago Pizza, in an article titled “Pizza to Go, Shares to Stay.” The ESOP, which puts the business in a trust that allows long-term employees to slowly earn shares by purchasing them with company profits rather than their earnings, was the only option that guaranteed “longevity for their business and financial security for their employees.”
As co-owner Barbara Gabel says:
You don’t succeed unless everyone does. We worked side by side with these folks for decades. How can you feel good about yourself if you get yours and don’t consider the people who have gotten you where you are?
The ESOP isn’t often used for restaurants; their profit margins are slim and the work force often transient. But Zachary’s has a healthy income and loyal employees—the eatery’s first hire, a high school student who worked as a dishwasher, is now the company’s vice president and a 40-year-old father of three. Also, the owners are happy with a slow transfer of the business as the trust purchases shares. Mainly they “didn’t want to sell Zachary’s to an outsider who might not share their commitment to the employees or the community.”
With values like that, a slice of Zachary’s deep-dish spinach and mushroom—served up by a part-owner—is going to taste even better.