Cypress Valley Meat Co., a slaughterhouse solution for independent meat producers, has transitioned to an employee ownership model through the formation of an Employee Ownership Trust (EOT) via Common Trust, providing a financial impact on its employee owner base as the company grows in profitability.

The team at Cypress Valley is keenly aware that workers in the meat processing industry are historically marginalized and exploited while being given relatively low wages compared to the skill levels required to perform the duties. Late CEO and founder, Andy Shaw, long-sought a foundation of empowerment and commitment to the Cypress Valley employees to solidify leadership's dedication to long-term growth and shared prosperity.

That commitment to building a lasting culture for employees led Cypress Valley to an employee ownership structure that is gaining steam in the United States. This transaction marks the creation of the first Employee Ownership Trust in the state of Arkansas, and more specifically, makes them the first EOT within the meat processing community.

"With the establishment of an EOT, our employees can get a more immediate payout through annual profit-sharing programs," said Cypress Valley CFO Ben Wihebrink. "Additionally, they can now participate in democratic governance while they are employed with the company."

"We believe that an Employee Ownership Trust is the best way to protect our employees from risk while allowing multiple options for them to benefit when the business is thriving," said Cypress Valley President and CEO Brandon Dunn.

Because Cypress Valley operates in the middle of the food value chain, and margins are small, they wanted a structure that was both flexible and meaningful for their employees. With help from Common Trust, the leadership team at Cypress Valley was able to incorporate an EOT structure that will help the young company continue to benefit their new employee owners both now and in the future.

"Our transition to EOT was planned out well and had great support from Common Trust," said Wihebrink. "Common Trust made planning and project management easier for us and brought a wealth of experience in these kinds of transactions."

"Because Cypress Valley employees work in mostly rural communities with lower wages, the ability to now share in a bigger profit pool is game changing," said Zoe Schlag, CEO of Common Trust. "With the establishment of this EOT, Cypress Valley has given their employees a direct stake in the company's success."

According to Wihebrink and Dunn, the impact of this transition is far-reaching in ways that they hope will drive the meat processing industry forward. In this structure, local food systems win, independent farmers win, and now their employee owners will share that success.

Source: Common Trust