GREENSBORO — You don’t have to fight The Man if you are The Man.

Thousands of workers across North Carolina are finding that out as they learn to think like owners as a growing number of companies share profits and stock with them.

Your company not with the program? Don’t worry. There’s room for more, according to a new report by the Budget and Tax Center, a progressive agency in Raleigh.

Employee stock ownership plans and other types of programs allow workers to even the gap between their earnings and management salaries, improve their companies through pride of ownership and build substantial retirement accounts.

“It makes me feel good to be in an organization where you can be genuine with your brothers and sisters,” said Cassandra Brown, the executive director of housekeeping for Greensboro-based Quaintance-Weaver Restaurants & Hotels, which began an employee stock ownership program in 2016.

The Budget and Tax Center, report says that $4.4 billion was paid to worker “cooperatives” involving at least 100 companies and 750,000 current and former workers, according to 2013 data.

Employee ownership programs vary widely. Some are retirement programs that deposit shares into accounts based on a company’s annual profits. Others give workers a strong influence through a democratic structure.

But the majority of companies will never make a move toward such programs and that will hurt the economy statewide, according to the report.

That’s because thousands of small- and medium-sized businesses across the state are facing a “silver tsunami” of aging owners who could die or retire without succession plans, according to Patrick McHugh, who wrote the report. Such companies often face bankruptcy or simply families unwilling to take over management after an owner dies.

But employee ownership helps companies succeed and preserves communities, he said.

“When a company is locally owned and locally controlled it makes it far less likely that a company pulls up stakes and moves,” McHugh said.

Many smaller companies with fewer than 1,000 employees operate private versions of employee stock ownership plans, where a small group of workers share direct ownership.

One of Greensboro’s most prominent examples is Quaintance-Weaver. With about 600 employees, the company created a trust in 2016 that collects and distributes “retirement units” to workers who qualify.

Through the trust, the company’s owners, including Chief Executive Officer Dennis Quaintance, were able to sell the management company to the trust, which took on debt to pay them. An independent company set the value for the company that manages the O. Henry Hotel, the Proximity Hotel and a group of restaurants.

Quaintance-Weaver still owns the company’s real estate, so the income comes from the company’s ongoing operations.

Unlike a 401(k), the workers don’t contribute a dime. Still, the ownership is tax-protected until a worker reaches retirement age.

Most of the employees, like Brown, are happy with the new program. But Quaintance says the real proof will come when they receive their first contribution statement later this year.

“How our colleagues feel about this is going to evolve over the next few years,” he said.

For Quaintance, the program reassures him that his brand of management — paying close attention to employees and guests — won’t vanish when he retires. It protects the company from outside ownership that might simply toss out the culture he has developed through the years.

Over in Morganton, they’re trying something similar. Molly Hemstreet started Opportunity Threads to give workers the chance to buy portions of the company and help determine its future.

The small company has 23 workers who cut and sew apparel, a skill that had all but vanished when textile jobs were moved offshore. But at Opportunity Threads she said it is thriving, partly through the commitment of workers who help guide the company’s daily operations.

Hemstreet said the company is still governed by executives, but the workers have a potent voice, voting each year on how profits will be distributed.

“It’s a very powerful change,” Hemstreet said. “It’s hard to sit at a sewing machine, but if you’re more efficient and more responsible for the company being successful, you’re going to have a different attitude.”

That sentiment is echoed at the Mast General Store, which is based in the mountain town of Valle Crucis. The company operates seven stores, including one in Winston-Salem, and employs 500 people.

Company President Lisa Cooper said 230 of those workers belong to the company’s retirement-ownership program.

Although Cooper and her family don’t plan to give up ownership or management of the company, the program gives workers an alternative to a 401(k).

“There is a sense of loyalty and ownership being part of it,” she said. “Over the years when the stock market hasn’t seen increases in the 401(k) program, having two options has been a win-win. I think it’s pretty certain we’ve always seen an increase in our stock value.”

Deb Lazenby, the community relations manager for several Mast stores, including the Winston-Salem location, walked among the dozens of old-fashioned candies, nostalgic foods and high-tech camping gear.

“We all work together,” she said. “We’ll pitch in, whatever it takes. You’ll never hear anybody say, ‘It’s not my job.’ ”

QUAINTANCE-WEAVER’S HOTEL-RESTAURANT OPERATION HAS NEW OWNERS — ITS EMPLOYEES

by Taft Wireback
November 17, 2016

GREENSBORO — The company that operates the O.Henry and Proximity hotels, Lucky 32 in Greensboro and three other restaurants now is owned by the employees who make the beds, clean the rooms, cook the meals and serve the food.

Chief Executive Officer Dennis Quaintance told a room full of his energized colleagues Thursday morning that he and his partners in Quaintance-Weaver Restaurants and Hotels had passed the baton of ownership to an employee stock ownership plan that is, essentially, a retirement fund for the people who work there.

“I cannot imagine a situation where our interests could be more aligned,” he told the standing-room-only gathering of staff members in the Proximity’s Weaver Room. “I’m emotional because this is one hell of a situation. It’s just amazing that we have this opportunity together.”

Quaintaince, 59, began this hotel-and-restaurant operation 28 years ago with Greensboro businessman Mike Weaver by opening the popular Lucky 32 restaurant on Westover Terrace. His wife, Nancy King Quaintance, joined the team several years later.
They added the two hotels and several restaurants over the years, and the Quaintances said Thursday that they will continue to lead the management team under the new business structure.

“In fact,” Dennis Quaintance said, “I’ll probably die in the saddle.”

Quaintance said the only way he would leave the helm would be if he stopped “skipping to work” most days out of enthusiasm for his job or if someone were to submit “objective feedback that I’m not the optimal person to play this role.”

An employee stock ownership plan gives a company’s employees a tangible stake in the company, building retirement benefits that they can convert to cash in later years. All employees, including management, are part of the plan and they reap its benefits in “retirement units” each year.

Those units each are revalued on the company’s annual profits and divvied up among employees based on their salaries. “Highly compensated” managers have caps on how many retirement units they can receive in any one year.

Such so-called ESOPs employ about 10 percent of the nation’s workforce in companies such as the Publix supermarket chain and Kohls department stores.

Across the United States, about 7,000 companies operate in an ESOP format. Their advantages include increased employee productivity, much less turnover and several types of tax advantages for both the 600-plus staff members at Quaintance-Weaver and the company itself.

ESOP expert Keith Butcher explained some of the plan’s many complexities to his audience, but he said he would be satisfied if the staff members left with the “general gist that this is a pretty good thing and a great opportunity.”

“It simply allows the company to be owned by a trust to the benefit of all the employees,” said Butcher, whose company based in St. Louis helped Quaintance-Weaver with the ESOP conversion. “It’s not a get-rich-quick-tomorrow plan.”

Quaintance told his new partners that he and the rest of the company’s leadership team pursued the ESOP to ensure the organization Quaintance-Weaver employees have built would remain intact with the same goals and values.

Quaintance-Weaver employees are eligible to participate in the new plan if they are older than 18 and work for the company more than 1,000 hours yearly. Their benefits are vested after three years on the job.

The new ESOP plan includes workers of all types at the two hotels, the Green Valley Grill at the O.Henry, Print Works Bistro at the Proximity and the Lucky 32 Southern Kitchens in Greensboro and Cary.

“You don’t put any money into it,” Quaintance said. “You gain participation just by working here.”

His audience was upbeat and seemed to appreciate the plan’s potential to, quite literally, enrich their lives in years to come. People who leave before retirement still retain their retirement account, which begins converting to cash payments five years after they depart.

Green Valley Grill server Morgan Gneiser said that before Thursday’s meeting, staff members only knew the meeting’s focus would be on a new companywide benefit. Speculation was rampant and focused mainly on the possibility it was a 401-K retirement plan, Gneiser said.

The ESOP plan seems likely to increase her loyalty to the company, where she has worked six years, said Gneiser, a Greensboro resident who is pregnant with her first child.

“I don’t know about through to retirement — that’s a long way away — but definitely for quite a few more years,” she said. “It’s just a great thing.”

The company’s main assets are its staff members, their skills and hard work and their institutional knowledge. As had been the case before the ESOP conversion, the hotel and restaurant buildings will continue to be owned by a real-estate partnership involving the Quaintances, Weaver and several others .

In an interview earlier Thursday, Quaintance noted that he was making the ESOP announcement nine years “almost to the day” since opening the elegant Proximity along Green Valley Road, which he built with so many environmentally-friendly features that it became the nation’s first hotel and restaurant to receive highest honors from the U.S. Green Building Council.

And Nancy Quaintance added that it had been nine years before that when they opened the nearby O.Henry, a modernized re-creation of its North Elm Street namesake — an architectural gem that had fallen into disrepair before its demolition in the late 1970s.
“Every nine years, we do something really cool,” Nancy Quaintance said of the company’s newest twist.

“We have a really long gestation period,” her husband said.

DINING