H-E-B is the largest private employer in the state of Texas. It is also one of the few companies that can go toe-to-toe with the likes of Kroger and Walmart and come out ahead. The grocer has long touted the role its employees (partners, in H-E-B speak) play in its success and is now rewarding them by making them part owners in the business.
On Monday, H-E-B announced it is launching a new employee ownership plan that will grant stock to 55,000 of its workers. The plan will mean that employees, as a whole, will be given a 15 percent stake in the business. H-E-B has been 100 percent family-owned since Florence Butt invested $60 to open the C.C. Butt Grocery Store in Kerrville, TX in 1905.
According to H-E-B, in January eligible employees will receive stock valued at three percent of their salary, plus $100 in stock value for each year of continuous service they have completed with the company by the end of 2015. Going forward, yearly contributions to the stock plan will be made based on company performance. To be eligible, H-E-B employees must be at least 21, have completed at least one year of service, and worked at least 1,000 hours in a calendar year.
H-E-B partners on the occasion of the company’s 110th anniversary - Photo: H-E-B
"Our partners are the competitive edge that brings innovation, growth, and success to H-E-B," said Charles Butt, chairman and CEO of the company, in a statement. "This plan has been my dream for decades. It is a gift that recognizes our partners' ongoing commitment to H-E-B. Our partners shaped our past, define our present, and will lead us into the future."
H-E-B's latest commitment to its employees is likely to further help its recruitment and retention efforts. The company currently pays above market rates for hourly workers ($10.25 starting minimum) and has long been known as one of the best employers in the grocery channel.
According to reviews on Glassdoor, H-E-B earns a rating of 4.1 stars out of five. Eighty-five percent of reviewers say they would recommend working at the company to a friend and 97 percent approve of Mr. Butt.
By going the employee-ownership route, H-E-B joins a list of other successful chains including Hy-Vee, Publix and Winco.