Owning a Piece of Hell

With so much bad news, I wanted to point to one good thing that happened this week: the owners of Hell's Kitchen, a well-regarded, long-time restaurant in downtown Minneapolis, announced to their 100 employees that they are transferring their personal shares in the business to a new employee stock ownership plan (ESOP).

According to the Star Tribune (whose story, as usual is paywalled), that means the current owners "will receive a portion of the restaurant's profits from the ESOP for years to come. But employees will get most of the future profits, which they will be able to use for retirement savings or additional income." And employees don't have to pay in now to buy out the bosses. Employee shares will be allocated based on how long they've been with the restaurant, and they'll accrue more the longer they stay.

One owner plans to retire by the end of 2019 and the other within two years. The restaurant is debt-free and has been consistently profitable with low turnover (for a restaurant). The ESOP can only improve that, I would think.

Hell's Kitchen is already unusual among restaurants in offering not just medical insurance but dental and vision. The owners exemplify an attitude that should be more common. For instance, one of them is quoted as saying, "I'd get my money faster by selling outright, but I wanted something good and fair for our staff. They're doing a magnificent job. Our employees deserve this more than anyone else."

Bravo to the out-going owners of Hell's Kitchen!