NOW Health Group Implements Employee Stock Ownership Plan to Foster Growth

NOW Health Group Implements Employee Stock Ownership Plan

In a significant move aimed at enhancing local ownership and prospects for growth, NOW Health Group (NHG) announced the establishment of an Employee Stock Ownership Plan (ESOP) that will transition 30% of family shares to employees. Founded in 1968 by Elwood Richard, NHG has grown to become a leading manufacturer of various natural products, including dietary supplements, sports nutrition, personal care items, and more. Their offerings are now available in health food stores across the U.S., Canada, and over 100 countries worldwide.

Commitment to Local Ownership

CEO Jim Emme provided insight into the motivation behind this strategic initiative. He emphasized the importance of having a clear plan for ownership succession to avoid the potential pitfalls that could arise from a lack of direction. For years, NHG received solicitations to sell the company, but Emme and the Richard family felt strongly about ensuring the business remains in the hands of those who contributed to its success: its employees and the community.

"We realized several years ago that we would eventually need a plan to transfer the ownership and management of the business to the next generation, or we would risk seeing our business either sold or possibly fail," Emme stated.

Through the ESOP, a tangible stake will be granted to the employee base, affirming NHG's commitment to its workforce. This initiative positions NHG uniquely, combining the legacy of its founding family with a modern approach to employee engagement and ownership.

The ESOP Mechanism

An ESOP is a retirement plan regulated federally that primarily invests in the shares of the employing company. Eligible employees will gradually accumulate company shares, allowing them to benefit from any increase in the company's value over time. At retirement or upon leaving the company, employees will receive the cash equivalent of their shares, creating an incentive structure that aligns the interests of employees with the overall success of the business. Importantly, the funding for this ownership transition will come from corporate earnings, meaning employees will not need to dip into their personal finances to participate.

The impact of ESOPs across American businesses is notable, with around 7,000 such plans currently in operation. These structures are particularly common among smaller to mid-sized firms seeking effective methodologies to ensure continuity while encouraging a strong business culture. Emme noted, "Most ESOPs are in smaller to mid-sized firms that are very successful and need a plan to transfer ownership to a future generation." NHG's decision to adopt an ESOP aligns with a growing trend where successful companies leverage employee ownership to secure their future.

Employee Communication Strategy

In light of this transition, Michelle Canada-Holda, Vice President of Human Resources at NHG, affirmed the company's commitment to transparent communication. She outlined steps that will be taken to engage employees and their families about the new ownership structure. "We are planning a series of employee communications – starting with a kickoff message, written materials, meetings with employees and their families, and the formation of an employee owners' committee," she explained.

The intention is to ensure everyone is informed about the changes and understands the benefits involved, fostering a sense of ownership and camaraderie among staff.

A Legacy of Health and Wellness

NOW Health Group remains steadfast in its mission to empower individuals to lead healthier lives through high-quality natural products. With more than 1,800 employees and decades in the industry, NHG shows no signs of slowing down. As it embraces employee ownership, the company is committed to not only maintaining its legacy but also achieving new heights of success.

As NHG embarks on this journey, the move signifies a renewed commitment to its employees, ensuring the company continues to thrive while valuing the contributions of the hardworking individuals at every level. This ESOP marks a progressive step towards a sustainable future for NOW Health Group, further solidifying its place as a leader in the natural products sector.