Oliver’s Markets sets up employee stock ownership plan

Sonoma County’s Oliver’s Markets is giving the term “locally owned” a new twist.

The privately held company, with four supermarkets spread from Cotati to Windsor, has set up an employee stock ownership plan that will enable most of its 1,000-plus workers to jointly buy 43 percent of the company over the next decade or so.

Owner Steve Maass said he set up the plan in order to keep his stores “in the community and keep them local.”

Maass, 71, said he didn’t want to one day sell his company to be absorbed into a bigger supermarket chain. Instead, he set up the employee stock plan and recently converted his business into a “social purpose corporation,” hoping the latter change will help provide extra reasons for future owners to rebuff takeover attempts.

The directors of social purpose corporations are expected by shareholders to consider the stated social and environmental objectives of their businesses, as well as the financial implications of any actions.

“This was very important to me because I spent all these years building this place, or helping build it,” he said. He acknowledged his longtime managers and staff also played a key role in the company’s success.

Maass started Oliver’s in Cotati in 1988. The company’s business office now is located in Santa Rosa, and it operates one store in Cotati, two in Santa Rosa and one in Windsor.

Oliver’s is considered an early leader in highlighting both natural and local products. More than a quarter of its products are made in the county.

The business was named by Progressive Grocer magazine the 2016 outstanding independent grocer with multiple stores in the U.S.

About 10.5 million U.S. workers belong to employee stock ownership plans, which are regulated as an employee retirement benefit plan, according to the National Center for Employee Ownership, an Oakland-based nonprofit that represents about 3,400 companies with such plans.

The “ownership culture” at such companies does boost performance, said Loren Rodgers, the center’s executive director.

“They’re more productive,” he said.

At Oliver’s, employees will take part in the stock plan if they are at least 21 years of age and work 1,000 hours or more this calendar year. A worker becomes fully vested after three years. Shares are allocated each year based upon annual compensation. When a worker retires or leaves Oliver’s, the company buys back the shares for cash.

A key point, said Maass, is the employees pay nothing out of pocket to acquire shares. Federal tax savings largely make possible the sale of company stock to his workers, he said.

For the employees, he said, “It’s like buying a mansion with no money down.”

The receipt of the stock is tax deferred, much like contributions in a 401(k) plan.

Maass said he decided to initially sell workers a significant share of the business and “see how we do” in the stock plan. Eventually, he said, employees could receive a majority of the company shares.

At such a time, the workers theoretically could decide to sell Oliver’s to a larger business, he said. That’s one reason he converted the company to a social purpose corporation, similar to “benefit corporations” that exist to provide social and environmental benefits as well as to make profits.

The new business structure allows worker-owners to consider more than what the company could be sold for.

“It says we’re not only here to make money,” Maass said.

You can reach Staff Writer Robert Digitale at 707-521-5285 or On Twitter @rdigit.

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