Brands in the News

Why Chobani’s CEO Gave Away $500 Million

29 Apr , 2016  

On Tuesday, Hamdi Ulukaya–founder and CEO of Chobani, the Greek yogurt giant–gave his employees 10% of the company. Each worker received a packet with a share grant commensurate with their tenure with the company. The gift came directly from the CEO.

This is quite a gift. A private equity firm recently valued Chobani between $3 and $5 billion, so a 10% gift is worth $300 million to $500 million. At a $3 billion valuation, the average award was $150,000.

The gift was a brilliant move for three reasons.

Most important, the grant rewards employees. Chobani is currently a private company, but many people expect it to sell or go public in the coming years. This gift ensures the employees will benefit. It keeps them focused on the company’s success and motivated to continue its growth. As one employee said, “It’s the best thing because you’re getting a piece of this thing you helped build.”

The move also builds the Chobani brand. The announcement this week generated considerable publicity, including an article in the New York Times. Chobani already had a strong brand with positive associations; this move will build it further. While many firms seem to be primarily committed to the bottom line and the CEO’s salary, Chobani is rewarding the entire team. Bernie Sanders would approve.

Finally, the grant enhances Hamdi Ulukaya’s reputation. It guarantees that his personal brand doesn’t just represent remarkable business success. It demonstrates that Hamdi is also concerned about the team. As he explained, “I’ve built something I never thought would be such a success, but I cannot think of Chobani being built without all these people.”

Giving away $500 million of your own money seems like a curious move at first glance, but when you consider the impact on employees, the Chobani brand, and Hamdi’s personal reputation, I suspect it was an easy decision.

____________________________________________________________________

I’ve recently written about Homeaway’s new fees. This week the company announced new, lower annual subscription fee and notable product enhancements. You can watch a video about the changes here. Overall, the moves are very smart, but by bungling the execution, Homeway took a positive strategy and turned it into a customer relations fiasco.



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