Mud Bay Announces Employee Ownership Plan
Employee Stock Ownership Plan launches at annual ‘Mudstock’ event
— With a dash of a pen — and years of pre-planning and hard work — the 324 employees of Mud Bay became owners of the Pacific Northwest’s largest pet retail company today.
Mud Bay co-CEOs Lars and Marisa Wulff announced the new Employee Stock Ownership Plan or “ESOP” Thursday at the company’s annual employee “Mudstock” training event, held on the campus of Green River Community College. Its stores and offices were closed Aug. 20 so that all employees could participate in the day’s events — a mix of education and team-building activities built around a Woodstock theme.
Currently, Mud Bay is owned by 35 shareholders, including founder, Elsa Wulff, co-CEOs Lars and Marisa Wulff and a handful of family, friends and company staff. Investments made by that core group were instrumental in expanding the store from one to nine stores, and set in motion the continued growth and success of Mud Bay today.
“We could not be where we are now without the hard work and dedication of our staff – our ‘Muddies’ — and the quality of our leadership team,” said Lars Wulff, Mud Bay co-CEO. “This is something we’ve dreamed of for years, but the company wasn’t ready. Now, we can make the transition to a whole company of owners. By continuing to focus on our three-part mission, staying true to our values and creating the Mud Bay Experience for every dog and cat owner, we believe this ESOP, and the company, will be very successful.”
Wulff said this year the company will have almost doubled its sales in the four years from 2011-2015.
“By continuing to grow, we should all benefit by watching our ESOP accounts grow nicely in the years to come,” he added. “And that’s really the benefit of an ESOP – it’s the ability to share that success with the people who created it: our Muddies.”
Mud Bay currently operates 33 stores in Washington and Oregon. Additional stores are set to open this year, including two locations in Oregon (Hillsboro, Tualatin) and two in Washington state (Sammamish, Bellingham).
Today, ESOPs are the most common form of employee ownership plans in the U.S., with more than 7,000 companies offering plans to more than 13.5 million employees.
To be eligible for the Mud Bay plan, employees must (1) be age 18 or older; (2) log 1,000 work hours (roughly 20 hours per week for 50 weeks); and (3) stay with the company through the last day of the ESOP plan year (Dec. 31).
Under the plan, Mud Bay will dedicate part of its profits toward the ESOP. Every year, or every other year depending on the company’s annual performance, the ESOP will use the money it receives from the company to buy shares of Mud Bay stock from Mud Bay’s current owners. These shares are directed into an employee stock ownership trust fund, which allocates the Mud Bay shares to individual ESOP accounts—one account for each eligible Mud Bay staffer. The size of each staffer’s allocation is based on how much the staffer earned in wages during the previous calendar year.
When staff retire or otherwise leave, Mud Bay buys the shares back at whatever the current share value is. Retirees can then spend or invest the money as they see fit. Mud Bay will also take the shares it has purchased from retired staff and place them back into the ESOP so that it can allocate them to the next generation of employees.
“Today’s announcement reflects the mission and spirit of Mud Bay,” said Marisa Wulff, co-CEO and vice president of store development. “Our employees invest a lot of themselves in their work. They train to become deeply knowledgeable about natural products for dogs and cats. They work with suppliers to provide the best possible products on our shelves,” she said.
“As a result, they build relationships with customers, which creates a positive relationship and successful stores. So for them to reap the benefits of that success is very fitting.”
Mud Bay’s growth and focus on continuous improvement have had a positive impact on the company. In July, Mud Bay was named Pet Retailer of the Year for 2015 by Pet Business Magazine. The publication singled out the company for warm, modern stores that play host to service-centered staff who focus on solutions over sales.
“It’s hard to not have a good experience at a Mud Bay store,” added Lars Wulff, “and that’s what makes us so proud of today’s announcement. Our people have really made the difference for us and our customers, transforming the practice of pet retail while contributing to the long-term health of dogs and cats. We’re proud of that, and we’re excited to share that success with our employees.”