We live in a time where we can have anything and everything. Our pumpkin-spice-latte- smart-phone-filled desires are at our fingertips. But with consumerism comes consequences; as we make our purchases based on convenience, we turn a blind eye to the the exploitation occurring behind the closed doors of capitalism. Employees are forced to work long, hard hours, only to see the shareholders — and not themselves — reaping most of the benefits. We foster our selfish desires tending toward instant gratification while forgetting the people making our food and products. We’ve grown too accustomed to waiting in the fast-moving line at our favorite coffee chain for that quick fix.
Not all businesses foster exploitation, though. Nestled on the corner of College Avenue and Oak Grove Avenue stands the always-bustling Zachary’s Chicago Pizza. Lively conversations and the comforting smell of baked dough and melted cheese fill the air. Zachary’s Pizza is 100 percent employee owned. I sat down with Leandra Schuler, Zachary’s vice president and a UC Berkeley alumna, to discuss the particularities of employee ownership and the ways in which this has brought Zachary’s success.
Schuler explained that in 2003, the founders, Zach Zachowski and Barbara Gabel, announced that in the wake of their retirement, Zachary’s would transform from a typical business to one that is employee owned. Zachowski and Gabel made this decision in order to preserve the legacy of Zachary’s through their loyal employees.
The company now operates as an Employee Stock Ownership Plan, or ESOP, meaning profits fund individual employee accounts, which in turn they use to purchase stock. Only Zachary’s employees can own stock. Unlike cooperatives, though, where all employees share an equal part in the company, ESOPs reward employees according to how long they’ve been with the company. The longer employees remain part of the Zachary’s crew, the more the value of their employee ownership account increases. Instead of everyone getting equal slices of pizza, an ESOP gives employees extra cheese and toppings for their hard work and loyalty.
Schuler started working at Zachary’s as a server and hostess in 1999, experiencing both the traditional business and the transition to an ESOP. “My personal experience with the ESOP has been really positive,” explained Leandra. “The advantage is that there are some really good retirement plans being built from the profits of the company. That’s something I feel that social security isn’t going to manage for me. So having some security for our employee owners who have been working here for a long time, I’m very proud of that, and it makes me feel rewarded.”
We foster our selfish desires tending toward instant gratification while forgetting the people making our food and products. We’ve grown too accustomed to waiting in the fast-moving line at our favorite coffee chain for that quick fix.
In addition to this individual advantage, Schuler notes that the staff has a “personal and individual motivation beyond most businesses to do a really great job and to make good pizza and be friendly. The more pizzas we’re able to sell and the more loyalty we’re able to gain from the community and our customers, the higher our company value is.” So, the harder they work, the more the company will succeed, and in turn each will get a bigger piece of the pie. This creates a positive cycle of mouthwatering pizza, extraordinarily friendly service, and benefits for the employees.
Despite its perks, the ESOP model has posed some challenges for Zachary’s. “There is quite a hearty amount of administrative and educational work behind the ESOP. It doesn’t just run itself,” Schuler adds. She explains that, at the transition, managers are not always prepared for the level of work that comes with running an ESOP. There are occasional communication challenges, and educating the staff about employee ownership and the ESOP model takes a lot of time and effort. But for Schuler and the Zachary’s employees, the benefits of being an ESOP far outweigh the drawbacks. Schuler points out, “Our main driver behind being an ESOP is to sustain Zachary’s as a successful business, as we have been for 30 years, and moving into the future, reward the people who are working for the company accordingly.”
Zachary’s challenges the way we view capitalism. “The heart and soul of the ESOP challenges (this), because the profits are going to the employees,” explained Schuler. The employees preserve Zachary’s legacy, and in return, the company takes care of them.
Zachary’s has found a way to stray from capitalist exploitation and challenges us to make more conscious decisions. Every decision we make has consequences, whether they are positive or negative. It’s time that we start making decisions that sustain fair business practices and choices that we can feel good about.