Garage door maker employees receive cash reward in takeover as private equity tests ownership model


In the otherwise sleepy town of Arthur, Illinois, this week brought a life-changing surprise for hundreds of workers at local garage door manufacturer, CHI Overhead Doors.

CHI’s private equity owner KKR is selling the company to steelmaker Nucor in a $3 billion deal. The sale marks one of KKR’s biggest comebacks in recent history, delivering a massive windfall both for the company and – uniquely – for CHI employees, from truck drivers to factory workers. plant.

On average, hourly workers at CHI will receive $175,000 in payouts, with the most permanent earning more than $750,000 as a result of the sale.

Rhonda Jamison, office manager at CHI, has been with the company for 17 years and will take home 5.5 times her annual salary.

“Words can’t explain how my mind went in a hundred directions,” she said. “There’s no way I’m expecting that much money.”

The idea of ​​giving grants to rank-and-file workers during a sale was the brainchild of Pete Stavros, co-director of US Private Equity at KKR. Stavros said he became interested in employee ownership at a young age because of 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 build wealth, on an hourly wage. And two, 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 the exact opposite.”

Employee share ownership model

Once he achieved a senior position at KKR, Stavros began experimenting with employee ownership models in the investments he oversaw.

“We’ve had good success. So it’s had great results for businesses, great results for workers,” he said. “It’s not charity, it’s not a gift.” They have generated an incredible amount of productivity in the company.”

Now, the company uses an employee-ownership model in all of its buyouts in the United States and hopes to convince its peers to do the same.

Other major private equity firms, including Apollo Global, Ares Management, Silver Lake and TPG, have partnered with Stavros’ nonprofit called Ownership Works. Each company has committed to implementing shared ownership models in at least three of its portfolio companies by the end of 2023.

Even Nucor will include its own profit-sharing model for CHI, and despite all the changes, CHI employees say they have no plans to leave the company.

“We have more responsibility to ourselves and to our teammates,” said Kenroy Morrison, general manager of CHI in New Jersey. “It’s one of those things where I don’t see myself going anywhere. I’m here for the long haul.”

Morrison said he plans to put his bonus into a college fund for his two-year-old son.

As for Jamison, who spends her days answering the phone and ordering supplies, she also has big plans for her new money.

“Well, we’re going to Disney,” she said. “I’m going to pay for my house, I’m going to pay for my cars, and we’re going to give a little to the church and help my kids a little.”


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