Employee-Owned Restaurant Group Pours $33M Into Workers’ Pockets Since 1995

The story

Newport Restaurant Group, an employee-owned company, has paid $33 million to its workers since 1995 through an ESOP. It operates 18 restaurants in Rhode Island and Massachusetts with about 1,100 employees.

Source: fortune.com

Our reading

The Newport Restaurant Group has achieved something that sounds like a dream for most workers: it’s 100% owned by its employees, and since 1995, they’ve collectively received $33 million in benefits. But here’s the twist—this isn’t a utopia. It’s a carefully structured system where employees get the upside of ownership, but also the responsibility of keeping the business afloat.

Imagine if your boss was also your co-owner. That’s the reality for Andy Staane, who’s been at The Mooring for 24 years. He’s not just a bartender; he’s an owner, and he’s seen the company grow. But what does that really mean? It means he’s got a stake in the success of every customer interaction, every menu change, and every new restaurant opening. It’s a bit like being a landlord, but with more responsibility and less rent.

The company’s CEO, Mick Lamond, calls it a ‘proven model’—but it’s not without its quirks. Employees must work 800 hours a year to participate, which is about 15 hours a week. That’s not exactly a full-time job, but it’s enough to qualify for the ESOP. If they leave, the company buys back their shares. It’s a win-win, or at least a win for the employees.

And if you’re thinking, ‘Why would a company do this?’ consider this: it’s a way to ensure loyalty, retain talent, and avoid the pitfalls of private equity. But it also means that the employees are the ones who bear the brunt of the company’s success—or failure. In a world where most businesses are owned by outsiders, Newport’s model is a curious blend of capitalism and collectivism, where the workers are both the labor and the investors.