The ESOP Podcast Episode 16 – Ken Baker CEO of NewAge Industries on the benefits of ESOPs and Shared Capitalism

The ESOP Podcast Episode 16 – Ken Baker CEO of NewAge Industries on the benefits of ESOPs and Shared Capitalism

Our guest is Ken Baker, CEO of NewAge Industries in Southampton, PA, and co-founder with Dan Adley of the Pennsylvania Center for Employee Ownership (PaCEO). In this informative interview, we learn how NewAge Industries grew from the dream of founder Raymond Baker into a 45 million dollar operation and a 49% employee-owned company. He then describes why his succession plan is for the employees to ultimately assume 100% ownership to continue the firm’s success and Raymond Baker’s legacy.

Ken Baker Interview

Ken Baker with Bret Keisling

Ken Baker educates others about ESOPs, through the training he conducts in his own company, and by sharing best practices with other companies in the state of Pennsylvania via the PaCEO.  He feels that ESOPs address a range of issues – the wealth gap, retirement savings, retention, and employee engagement. ESOPs also raise the wealth of the American worker. When employees have financial stability, they perform better in the workplace. A strong ESOP community benefits all ESOP companies, not just one, as well as society as a whole.

The bust of Raymond E. Baker mentioned in the podcast. 
The plaque reads: “Raymond E. Baker, Founder of NewAge industries in 1954. His hard work and ideas are now confidently entrusted to the next generation, management team, and team members to continue his vision and success. Dedicated March 21, 2002.”

More about NewAge Industries

NewAge Industries logo

NewAge Industries is a multi-million dollar manufacturer of plastic and rubber tubing and hose, and a supplier of fittings, clamps, and accessories for a wide variety of industrial and high purity applications. The company has its corporate offices and state-of-the-art manufacturing center in Southampton, PA.

NewAge Industry Entranc

“NewAge Industries established its ESOP – Employee Stock Ownership Plan – in January 2006, when CEO Ken Baker sold 30% of the company to the employees as a way to ensure the company’s continuation. The existence of the ESOP adds a new facet to the company’s culture, namely the pride of ownership, while it discourages a possible buyout from a competitor or other business. The ESOP is another feature of the company’s retirement benefits that include a pension plan and optional 401(k) plan.

In January of 2013, Baker sold an additional 10% to the employees bringing employee ownership up to a 40% share. Most recently that has been increased to 49% effective in 2016.

Since the inception of the ESOP, NewAge has continued to grow and prosper. Demand for its high purity products, marketed under the AdvantaPure name, has experienced tremendous growth, and its standard products have also seen a substantial increase in sales. This success and the satisfaction of employee ownership has a real and beneficial effect on the morale, attitude, and future retirement of NewAge Industries’ employee-owners.

NewAge Industries built its solid reputation by providing a high level of customer support and service, along with superior products, and the AdvantaPure division is well on its way to a similar standing. The establishment of the ESOP lets employees expand upon that by allowing them to take true ownership of their positions. Baker says “When a customer calls, they can speak with an owner. The employees’ jobs are part of an investment in their future, and that’s reflected in their communications with customers and suppliers, and with each other, now more than ever.”

Another customer benefit resulting from the ESOP is that it sets up a succession plan for the organization. Many of today’s large, multi-national corporations become larger by acquiring small companies. Plants are often closed, and production is moved offshore. The knowledge and talent of those employees is lost as they find jobs in other industries. Baker wanted to avoid that possibility and, at the same time, help secure a future for NewAge, AdvantaPure, and its employees.”

NewAge ESOP 2014 meeting

[Source: NewAge Industry is employee owned.]

More about the Pennsylvania Center for Employee Ownership

The Pennsylvania Center for Employee Ownership (PaCEO) promotes a better understanding of the values of employee ownership among business leaders, public officials, employees, members of the media, students, teachers, nonprofit leaders, consumers, and other persons and organizations in Pennsylvania.

The objectives of the PaCEO are as follows:

  1. Raise awareness. Promote greater awareness of employee ownership as a form of business succession planning among various stakeholders in Pennsylvania.
  2. Create more employee ownership. Increase the number of new employee-owned companies in the state, and increase the percentage ownership of existing employee-owned companies in the state.
  3. Improve the Pennsylvania economy. Strengthen the state’s economy by retaining and expanding the local workforce through employee ownership.

[Source: Pennsylvania Center for Employee Ownership, About Us]

Capital Trustees is proud to be one of the founding sponsors of the  Pennsylvania Center for Employee Ownership (PaCEO).  Of course, the benefits of ESOPs extend far beyond the borders of Pennsylvania. The PA Center of Employee Ownership is affiliated with the National Center for Employee Ownership which continues the work of ESOP awareness on a national level.


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