H‑E‑B, the largest private employer in Texas, is enabling its 55,000 partners the opportunity to receive a portion of stock in the company under a new employee ownership plan.
Launched in tandem with the company's 110th anniversary, the Butt family founders and current owners will retain their primary ownership. H‑E‑B, which operates more than 370 stores in Texas and Mexico, anticipates that its partners will own approximately 15 percent of the company over time.
"The partner stock plan is a milestone and a recognition of our most important resource – our people," said Charles Butt, chairman and CEO of the San Antonio-based H‑E‑B.
"Our partners are the competitive edge that brings innovation, growth, and success to H‑E‑B. This plan has been my dream for decades," noted Butt, "to lead us into the future. It is a gift that recognizes our partners' ongoing commitment to H‑E‑B."
The plan rewards the hard work, dedication and loyalty of H‑E‑B partners. In January 2016, eligible partners will receive a grant of stock valued at 3 percent of their salary, plus $100 in stock value for each year of continuous service completed by the end of 2015. Going forward, yearly contributions to the stock plan will be made based on company performance.
Craig Boyan, H‑E‑B president and CEO, said: "This historic offering reflects our commitment to our partners and the communities we serve. We are anchored in our mission to hire the best people, offer the best service, provide the best products at budget sensitive prices, and operate our business in a way that reflects our deeply ingrained value system."
To be eligible, a partner must be at least 21 years old, have completed at least one year of service and worked at least 1,000 hours in a calendar year.
The modified ESOP plan enhances the long‑term financial security of partners and will be offered in addition to all of H‑E‑B's existing compensation programs including a 401(k) plan that includes a company match. Eligible partners will be automatically enrolled without having to make a contribution.
H‑E‑B was founded in 1905 by Florence Butt in a tiny store in Kerrville, Texas. Her youngest son, Howard Edward Butt (1895‑1990), led the company's entrepreneurial period, 1920‑1971, and the company's name, H‑E‑B, reflects his initials. When his youngest son, Charles Butt, was named president in 1971, H‑E‑B recorded $221 million in annual sales. Today, its annual sales exceed $23 billion. Charles Butt's leadership and strong commitment to employees landed him as the third highest-rated CEO in Glassdoor's 2015 survey. Additionally, H‑E‑B ranked seventh on Glassdoor's Employees' Choice Awards for 2015.
Other family members are among H‑E‑B's management, which is led by its officers. Howard Butt, III has led the development of the 52‑store Supermercados Internacionales H‑E‑B division in Mexico, headquartered in Monterrey, Nuevo Leon, a city of 4 million. It operates stores in several Mexican states.
Stephen Butt heads Central Market, headquartered in Dallas, which operates stores in several Texas cities.