As a human-resources professional, Jennifer Briggs got used to firing people. She’d refer to it as “layoffs,” “right-sizing,” or whatever euphemism her employer wanted her to use at the time. She was a foster child turned single mother who had relied on food banks to feed her kids, and, as unpleasant as it was, managing and cutting employees at a large public company became her livelihood. So she compartmentalized the painful parts as best she could. “I downsized a lot, and it wore me down,” Briggs says. But, she adds with half a smile, “I’m really good at it.”
In 2004, Briggs took a job as vice president of human resources and organizational development at New Belgium Brewing in Fort Collins, Colorado, not far from where she grew up. She liked that the company already had a culture of shared governance and a profit-sharing plan for employees. And it was during her tenure that cofounder Kim Jordan called an all-hands meeting and announced that she had sold the company.
The several hundred anxious employees each received envelopes; inside, Jordan told them, they’d learn the identity of the buyer. To the sound of an auditorium full of paper-tearing, one by one they found themselves holding a mirror. The tearing turned into silence, then cheering.
Since December 2012, the company has been 100 percent employee-owned. This counterintuitive turn of events—that hundreds of people could unknowingly, without paying a cent, buy the company they work at—is only possible (and actually somewhat commonplace) thanks to a device known as the employee stock ownership plan, or ESOP.
Beginning in 1974, Congress has recognized the ESOP as a tax-advantaged retirement plan, like a pension program or a 401(k). This means that in addition to investing employees’ savings in the broader stock market, the ESOP could invest in their company, even to the point of owning the whole thing. In the process, companies can issue shares to employees with money borrowed from the seller of the company or a bank and pay it back with employer retirement contributions and any dividends that the shares earn. If their company does well, rank-and-file employees can end up reaping gains far beyond their wages, to the point of low-wage workers retiring as millionaires.