Plastics packaging maker Novolex Holdings is rolling out a new employee retention program that will reward employees if the company's ownership changes control in the future.
Spurred by CEO Stan Bikulege, the new program will give workers who have been with the company for at least a year a share in the proceeds if Novolex is sold in the future.
The program is being funding by Bikulege as well as majority owner private equity firm Apollo Global Management Inc., which took majority control of Novolex earlier this year.
Exact details of the program are yet to be determined, Chief Human Resources Officer Lisa Dulski said in an interview.
Bikulege was not available for an interview to discuss the Broad-based Employee Award Plan, as its officially called, but Dulski provided some inside perspective.
"Certainly something he and his family have talked about for a long time, that he wanted to make sure it wasn't just a select group of employees that got rewarded for the success of the company," she said. "It was essentially everyone in the organization that got rewarded if we go through another change."
Employees at the Hartsville, S.C.-based company must have one year at the company at the time of change of ownership to qualify.
"The exact reward value for employees would be determined at a change of control. But we're not discussing the exact amount of money that was set aside for both Stan and Apollo," Dulski said. "Definitely a significant amount."
Novolex currently has about 10,000 employees, mostly in North America, but also some in Europe. "We feel strongly that as we continue to grow that they have a piece of that growth," she said.
Dulski said the plan will help not only retain current workers but also attract new employees.
Apollo acquired a majority interest in Novolex earlier this year and former majority owner Carlyle Group has retained a minority stake in the firm. Carlyle Group supports the new award plan, Dulski said.
If the past is any indication of the future, it will be only a matter of time before Novolex ends up with a new owner.
The company has grown over time through a series of private equity majority owners.
Carlyle Group purchased Novolex from majority owner Wind Point Partners and minority owner TPG Growth in late 2016. Wind Point took its majority stake from TPG in a 2012 deal. Bikulege has been leading Novolex since 2008.
"Novolex packaging products are developed, manufactured and sold by thousands of hardworking colleagues who are the backbone of our organization," Bikulege said in a statement. "We are establishing the Novolex Broad-based Employee Award Plan to recognize, salute and demonstrate how much we value the contributions of the employees in our Novolex Family."
Novolex might be best known for its plastic bag business made through its Hilex Poly division, but the company also makes institutional garbage can liners and medical waste bags as well as thermoformed packaging. The company's portfolio also includes paper fiber-based packaging as well.
Novolex is No. 9 in the latest Plastics News ranking of North American thermoformers with an estimated $500 million in annual sales for the region. It ranks as No. 6 among film makers in North America, with an estimated $1.725 billion in annual sales, Plastics News estimates.
"The timing was right," Dulski said. "This program will go a long way to motivating and retaining our employees."