H-E-B supermarket chain is said to grant more than $1 billion worth of stocks to 55,000 hard working employees.
On Monday, H-E-B supermarket chain said in a press release that it was giving out shares of the company's 100 percent family owned stocks — equivalent to 15 percent of its assets — to its employees. This unprecedented move by the Texas-based firm came in the midst of a growing argument in the United States on the issue of how employers and companies treat low-wage workers as well as highlighted contest for retail staff.
Reuters reported H-E-B supermarket chain, owned by the Butt family and founded 110 years ago has a total of 370 stores in Mexico and Texas and produces sales around the ballpark figure of $23 billion every year.
H-E-B supermarket chain's decision came at the time where U.S. retailers were scrambling to entice laborers with the seven-year-low unemployment rate.
The largest private employer in Texas' competitor, Wal-Mart Stores, lifted earlier this year its minimum wage to $9 an hour and was planning to increase it to $10 per hour by the next year. On the other hand, H-E-B supermarket chain employees receive a minimum wage of $10.25 an hour.
How can the employee receive H-E-B's shares? Primarily, the employee must be over 21 years old and has worked at the supermarket chain for one year and has clocked in a minimum of 1,000 hours in a calendar year.
Craig Boyan, H-E-B Chief Operating Officer and President said the company's intention was to encourage loyalty and give recognition to its workers' contributions and also intensify their long-term financial security.
“We think there is great benefit in a more empowered, inspired, proud, trained workforce,” continued Mr. Boyan.
H-E-B Chairman Charles Butt said, "The Partner Stock Plan is a milestone and a recognition of our most important resource — our people. Our Partners are the competitive edge that brings innovation, growth and success to H-E-B."
According to the New York Times, H-E-B employees who will be subjected to the planned sharing of stocks will be able to cash out when they retire from or leave the company. They will also likewise be eligible to receive dividends based on the earnings of the retailer.
Meanwhile, family members who voted for the approval of the distribution of stocks included the head of the Central Market division Stephen Butt and Howard Butt III, who has spearheaded the development of the Monterrey, Mexico-based 52-store Supermercados Internacionales H-E-B division. The Butt family will maintain 85 percent of H-E-B supermarket chain shares, as per The Dallas Morning News.