Freshpet, a startup that seeks to reinvent the pet food industry with high-end dog food, is offering a fresh take on its benefit package: stock ownership.
The organic cat and dog food manufacturer based in Secaucus, New Jersey, says it will grant its full-time employees equity in the company beginning next year. The restricted stock units will be distributed annually to full-time hourly employees who have worked at the company for at least a year.
It’s unusual to see a company offer a stock program to its hourly employees, but Freshpet is betting that the equity will help it recruit and retain its employees in a tight labor market.
“It is a way to make employees feel engaged and feel tied with the company and its future success,” says Julie Stich, associate vice president of content at the International Foundation of Employee Benefit Plans.
The shares Freshpet is offering will vest over a three-year period and employees will be eligible for additional stock every January, which is a great talent-retention device, Stich says.
“The value of these shares won’t actually mean anything unless the employees stay for three years from the time they are given,” she says.
Freshpet’s stock has performed especially well, so offering shares now is a smart strategy. The company’s stock increased by 91% since the start of the year, rising from $20 in January to $37.22 Wednesday. Meanwhile, the S&P 500, widely seen as the benchmark for the overall economy rose 1.21%.
Roughly half of Freshpet’s 221 full-time employees, 119, will be eligible for the grant on Jan. 1, reported
Despite the bullish market, the percentage of companies offering stock options has continued to decline in the past five years, according to the Society for Human Resource Management’s
Nine percent of companies polled by SHRM offer stock purchase programs like that of Freshpet’s, down from 12% since 2014.
Freshpet’s restricted stock unit offering is in addition to its benefits such as matching 401(k) plan, medical, disability and pet insurance, and perks such as free pet food and Ice Cream Fridays.
