PAQ Inc., an independent franchisee of Food 4 Less operating 20 stores in central and northern California, has created an employee-owned stock ownership plan (ESOP) in light of the retirement of owners Patricia and John Quinn. Business partner Glenn Evans will remain with the company as chairman of the board. The three partners founded the business in 1995.
“By selling 100% of the company stock to an ESOP, the company became federal and state income tax-free, increasing cash flow dramatically and providing the funds to pay owners for their stock,” said Roy Farmer, managing director of Capstone Headwaters, the investment banking firm that advised PAQ. “The tax savings also allow the company to be more competitive and continue to be the low-price leader in their markets.”
Along with the leadership changes, Bill Cote has been promoted to CEO from chief financial officer, and Chris Podesto is now SVP and GM after serving as executive director of marketing. Brad Clark was promoted to VP of operations, and Janice Bloudoff was named VP of human resources.
Through the ESOP, about 1,250 employees will become partial owners, with the number growing as high as 1,800 employees who could potentially meet the qualifications. Employee qualifications include being 21 years old and having worked for at least one year with PAQ.
“Since we’ve announced this internally, across the board, employees are excited about this opportunity,” said Cote. “We’re going to feel fresh energy from everybody.”