Garage-door maker employees get cash reward in takeover as private equity tests ownership model
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In the otherwise-sleepy town of Arthur, Illinois, this week brought a life-changing surprise for hundreds of workers at locally based garage-door maker, C.H.I. Overhead Doors.
C.H.I.'s private equity owner, KKR, is selling the company to steel manufacturer Nucor in a $3 billion deal. The sale marks one of KKR's largest returns in recent history, generating a massive windfall for both the firm and — uniquely — C.H.I.'s employees, from truck drivers to factory workers.
On average, hourly workers at C.H.I. will receive $175,000 in a payout, with the most-tenured earning more than $750,000 as a result of the sale.
Rhonda Jamison, an office manager at C.H.I., has been with the company for 17 years and will be taking home 5.5 times her annual salary.
«Words cannot explain how my mind was going in a hundred directions,» she said. «There is no way that I would have ever expected this much money.»
The idea of giving rank-and-file workers equity grants in a sale is the brainchild of Pete Stavros, KKR's co-head of U.S. Private Equity. Stavros said he became interested in employee ownership at a young age due to his father's work experience.
«My dad was a construction worker for 45 years,» Stavros said. «He actually loved his job, except for, really, two things: one, he couldn't create wealth, on an hourly wage. And then second, the hourly wage itself really led to a misalignment of incentives with his employer, because the employer wants fewer hours and no overtime, and the workers want just the opposite.»
Once he hit a leadership position at KKR, Stavros began experimenting with employee ownership models in the investments he oversaw.
«We had good success. So, it delivered great results for companies,
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