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At Chobani, Now It’s Not Just the Yogurt That’s Rich

nytimes.com

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Re: At Chobani, Now It’s Not Just the Yogurt That’s Rich

#31

Post by mjfern »

It's great to see a founder CEO (Hamdi Ulukaya) making a bold ethical move like this to support his employees. It's not flashy or earth shaking, but it's very real and it will definitely change many lives for the better.

This story reminds me tangentially of the time when Hewlett and Packard, when faced with a downturn at HP, decided to cut pay across the board so the company could avoid layoffs. Once HP recovered, I'm assuming they reinstated previous salary levels and then some. HP then benefited from a highly committed and skilled workforce who deeply respected their leaders and company.

Unfortunately, these stories reflect the (very rare) exception and not the rule. Today, we're much more likely to see CEOs and executive teams earning (multiple) millions in salary and options, all the while they are outsourcing jobs, implementing layoffs, converting full-time jobs to contract and part-time jobs, and so on. These CEOs are extracting as much wealth as they can, at the expense of their employees.

We desperately need more ethical, bold leaders like Ulukaya, Hewlett, and Packard who are going to shape the future of business; a future that is kinder, compassionate, and community-minded.

Re: At Chobani, Now It’s Not Just the Yogurt That’s Rich

#32

Post by BinaryIdiot »

CydeWeys wrote: post #22
dimino wrote: post #14

Earlier quoted context omitted.

Is "hire many people" one of the things that falls under "things that don't scale"? I kind of thought that meant more like the opposite. In any event, I wasn't maligning Chobani, just expressing my surprise.

I'm just surprised that you're surprised that a large number of people are involved in the manufacturing and distribution of a physical good. If you think 2,000 employees is a lot, wait until you see how many employees a company like Ford has. I think your mind is a little bit stuck in the SF bubble.

> a large number of people are involved in the manufacturing and distribution of a physical good.

Manufacturing per product is typically limited to few locations (likely 1 location for this company as far as I can tell). Yeah it's a lot of work but I'm curious as to what their make-up is as far as employees go. Reading up on a lot of logistics it seems like they could get away with 1,000 so I'm curious as to what those 2,000 do :)

> If you think 2,000 employees is a lot, wait until you see how many employees a company like Ford has

Seems like an apples to organges comparison. Ford does R&D on vehicles which include a vast amount of complex parts but they also do manufacturing all across the world, various offices to manage this and work with partners, dealer inspectors, etc. Ford has multiple products that all are incredibly high in complexity next to yogurt.

Re: At Chobani, Now It’s Not Just the Yogurt That’s Rich

#33

Post by BinaryIdiot »

dominotw wrote: post #29

Chobani is poison. Insane amount of added sugar. Stay away from it.

I'm not a fan of the taste of texture but I don't think I'd call it "poison". Besides this is irrelevant to the conversation at hand as it's about the company's stock redistribution not its product.

Re: At Chobani, Now It’s Not Just the Yogurt That’s Rich

#34

Post by BinaryIdiot »

dimino wrote: post #4

Congrats, but I'm always blown away at the size of some companies. Do you really need 2000 people to make yogurt? Airplanes are big complex systems, so I get that, but yogurt? Edit: Apparently I rubbed some folks the wrong way. I didn't mean to think I could do better, I just meant it's a wild thought that something so "simple" as yogurt could require so many people to make. You guys probably know about "I, Pencil",…

I'm surprised you're being downvoted so heavily. I haven't done food manufacturing before but I've looked into it a few times (so I'm far from an expert but I at least know of a thing here and there). 2,000 seems pretty high to me.

I would love to see a breakdown for their employees and what their roles are spread throughout the company. Also how many manufacturing locations they have (I thought it was just one).

Re: At Chobani, Now It’s Not Just the Yogurt That’s Rich

#35

Post by andrewfong »

> But unlike many of those tech companies, Mr. Ulukaya is giving his employees a piece of the company after its value is firmly established.

I wonder how they set this up tax-wise. Stock grants are income, even before you sell. In tech companies, you typically get the stock when it's super cheap, so the tax hit is minimal. But here, since the value's pretty firmly established, the employee is potentially on the hook for quite a bit. And depending on the details of the grant, it may not be possible for employees to sell off their stock to pay taxes.

There are several ways to solve this. The employees could be getting options (set up so taxes are deferred until they exercise). Or the company could just eat the tax themselves. But kind of curious which route they took.

Re: At Chobani, Now It’s Not Just the Yogurt That’s Rich

#37

Post by rhc2104 »

andrewfong wrote: post #35

> But unlike many of those tech companies, Mr. Ulukaya is giving his employees a piece of the company after its value is firmly established. I wonder how they set this up tax-wise. Stock grants are income, even before you sell. In tech companies, you typically get the stock when it's super cheap, so the tax hit is minimal. But here, since the value's pretty firmly established, the employee is potentially on the hook…

It sounds like the employees don't actually get the shares until a liquidity event. (This is how RSUs work at startups.)

Re: At Chobani, Now It’s Not Just the Yogurt That’s Rich

#38

Post by subpixel »

mjfern wrote: post #31

It's great to see a founder CEO (Hamdi Ulukaya) making a bold ethical move like this to support his employees. It's not flashy or earth shaking, but it's very real and it will definitely change many lives for the better. This story reminds me tangentially of the time when Hewlett and Packard, when faced with a downturn at HP, decided to cut pay across the board so the company could avoid layoffs. Once HP recovered, I…

Interestingly, I recall reading a story suggesting that the CEO was on his way out of the company less than a year ago, when the whole Idaho plant expenditure looked like a failure.

The turnaround is a nice reminder that running a business sometimes requires ignoring the people whose job is to second guess and critique your every move.

Re: At Chobani, Now It’s Not Just the Yogurt That’s Rich

#39

Post by existencebox »

mjfern wrote: post #31

It's great to see a founder CEO (Hamdi Ulukaya) making a bold ethical move like this to support his employees. It's not flashy or earth shaking, but it's very real and it will definitely change many lives for the better. This story reminds me tangentially of the time when Hewlett and Packard, when faced with a downturn at HP, decided to cut pay across the board so the company could avoid layoffs. Once HP recovered, I…

I agree, however, I don't see the incentives that would motivate change to the current system.

Where is the mass employee outrage and "voting with our feet" for the wage suppression some of our largest employers supported? We can all have high minded ideals but at the end of the day our options are often VERY limited, as few would willingly take a massive pay cut for their ideals, especially given the inherent commons problem in that many people would need to do so simultaneously for the powers that be to "Feel" it.

How do we actively motivate this change when most of the power and incentive dynamics are _not_ in the employee's favor? (I mean this as an honest question, I don't see any easy answers)

Re: At Chobani, Now It’s Not Just the Yogurt That’s Rich

#40

Post by morgante »

mjfern wrote: post #31

It's great to see a founder CEO (Hamdi Ulukaya) making a bold ethical move like this to support his employees. It's not flashy or earth shaking, but it's very real and it will definitely change many lives for the better. This story reminds me tangentially of the time when Hewlett and Packard, when faced with a downturn at HP, decided to cut pay across the board so the company could avoid layoffs. Once HP recovered, I…

> This story reminds me tangentially of the time when Hewlett and Packard, when faced with a downturn at HP, decided to cut pay across the board so the company could avoid layoffs.

It mystifies me that cutting pay instead of getting rid of deadweight is seen as noble or honorable.

If I were working at HP, I would have quit the second they decided to cut my pay just so they could avoid needed firings.

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