Ben and Jerry’s Annual Stockholder Meeting

6:30 pm Business Stories


 Sunday, July 3, 1994

 By DAWN SHURMAITIS; Times Leader Staff Writer

 The annual meeting of Ben & Jerry’s stockholders is scheduled to start at 10 a.m. At a quarter past, the board of directors ambles in, decked in purple T-shirts and baseball caps advertising the company’s latest ice cream line.

The stockholders are equally casual. Moms push babes in strollers toward a Peace Pop giveaway. Old timers in socks and Birkenstocks shuffle toward the front of the meeting place — a big top pitched on the side of a Vermont mountain.

 There isn’t a suit or a tie in sight at Sugarbush.

 The music blasting from the speakers — Steely Dan followed by Benny Goodman — dies down as the bearded chief executive officer (CEO) and co-founder Ben Cohen takes his seat on a dais decorated with the ice cream company logo of clouds and cows.

 “As is our tradition,” Cohen says, “we’ll have the meeting in two parts: the ridiculous boring stuff and the real meat, when we talk about interesting things.”

 Cohen gets the boring stuff over quick.

 He chants the official minutes, prompting hoots of laughter from the 200 or so stockholders. A trio of employees clad in foam rubber fruit sing “I second the motion” to the Motown tune of “I second that emotion.”

 When Cohen asks “Is there any discussion?” a tot in the crowd cries out “Nooooo.”

 But the playful mood pops like a balloon when talk turns to the on-going search for a new CEO and the abolishment of the company’s long-standing commitment to limit the top salary to no more than seven times that of the lowest.

 Founded in 1978 by Cohen and Jerry Greenfield, a pair of socially-conscious Jewish boys who met in a 7th grade gym class, Ben & Jerry’s Homemade Inc. is in a state of flux. An increasingly competitive global marketplace is forcing major upheaval at a company that’s grown from a single ice cream shop founded on a whim and a $12,000 investment to a company with $140 million in sales in 1993. Sales are strong in Pennsylvania, where the company began selling its products in 1985. Last year, Keystone ice cream eaters consumed 766,811 gallons of the premium ice cream, which sells for between $2.69 and $3 a pint.

The free spirits who’ve run Ben & Jerry’s the past 16 years are now combing corporate America for a super-paid CEO to usher the super premium ice cream company into the next century.

 Although Cohen is stepping aside as CEO, for which he earned $135,800 last year, he will remain chairperson of the board of directors. Greenfield remains vice chairperson. Their company, they insist, will not be sold. But someone other than wacky Ben and Jerry needs to run things for a while.

 Someone worth possibly as much as $350,000 a year.

 `With incredible dismay’

 The recently announced changes did not please many of the stockholders, some of whom have supported the company since its humble beginnings in a renovated Vermont gas station.

 “It was with incredible dismay that I read you’re doing away with the 7-to-1 salary ratio,” Linda Wilcox, a New York resident with 3,200 shares, tells the board during the shareholders meeting.  “That really grinds me.”

 Cohen, his round face uncharacteristically serious, says of the “toughest decision” the board ever made: “There’s no question one era is ending and another beginning. But Ben & Jerry’s is right on schedule.”

 A Vermont corporation that makes ice cream and frozen yogurt distributed in all 50 states as well as Russia, Ben & Jerry’s has long been lauded for its offbeat business approach and dedication to social causes. In 1993, Ben & Jerry’s Foundation Inc. gave away $808,000 in grants aiding the poor, women, minorities, children and the environment.

 The company’s commitment to causes remains staunch. So does its commitment to profit.Last year, for the first time, the company’s growth rate slowed. While net sales still increased 6.3 percent in 1993, the stock price took a beating — plummeting to $17.5 a share. A year before, it traded at $28.50.

 Blame the ice cream wars.

 In 1992, main competitor Haagen-Dazs introduced a line of chunky flavors designed to compete directly with Ben & Jerry’s successful chunky line. The Pillsbury-owned company slashed prices and advertised heavily. Ben & Jerry’s fought back with four new flavors, eventually outselling the Haagen-Dazs line.

 But Ben & Jerry’s market share suffered temporarily. In its annual report, the company says it has regained momentum and is moving forward, thanks, in part, to sales of frozen yogurt. Surging sales have made Ben & Jerry’s the leader in super premium yogurt sales.

 `Reached new heights’

 Last month, Ben & Jerry tried to divert attention away from money issues by launching a “Yo, I’m your CEO” contest open to anyone who can write a short essay on why he or she deserves to be CEO.

 First prize is the job. Second prize is membership in the Ice Cream for Life Club. (“Go for this one,” Ben and Jerry urge, “it’s the better deal.”) So far, the contest has generated 6,000 replies — and reams of publicity.

Ultimately, the board, aided by a corporate head hunter, will choose the new CEO, who’s expected to take over in six months. The search was the talk of last weekend’s annual stockholder’s meeting.

Lou and Joyce Guttman, of Stratford, Conn., bought 500 shares five months ago, when the stock price plunged. He’s an attorney. She’s a social worker. They take a pragmatic view of the CEO controversy.

“Entrepreneurs are visionary and creative. It takes different skills to manage,” Lou Guttman said while downing a breakfast of Cherry Garcia ice cream. Before the meeting, shareholders were treated to Green Mountain coffee, bagels, cream cheese, doughnuts — and all the ice cream they could eat.

 “It’s a recognition that the company has reached new heights.”

 `Hug the world’

 No question, Ben & Jerry’s is like no other company.

 Spike Lee directed the last company commercial. In the annual report, printed on recycled paper and highlighted by a rainbow of graphics, co-founder Greenfield signs off “In peace and hope.” In publicity pictures, President Charles Lacy sports a “Route 66” T-shirt.

 Their casual attitude and ’60s style has helped attract publicity and keep sales high. Their commitment to their product and their employees keeps turnover low.

 Starting wages at Ben & Jerry’s remain at $8 an hour. The average pay in the top management tier is $79,734. Workers in the lowest tier average $20,372. The 500 employees receive health, dental and dependent coverage for children, spouses or gay and lesbian partners. Maternity and paternity leave is available.

 In addition to profit sharing and health benefits, employees are treated to a massage therapist who offers free 15-minute rubdowns. And every year, the company treats shareholders to a free, two-day party.This year’s bash was held the weekend of June 25.

 The company won’t release the cost of the “One World One Heart Festival” held at a ski resort a few miles from its headquarters in Waterbury, Vt. But it paid for 20 entertainers, including top names Bo Diddley, The Band,Michelle Shocked and Taj Mahal, as well as free ice cream for all stockholders.

Public relations czar Rob Michalak said the festival typically attracts 40,000 people over two days. While enjoying arts, crafts and vegetarian fajitas, festival-goers were urged to recycle, send post cards to congressmen and pay more attention to issues affecting children.

 All food vendors used compostable material. The crowd, which attracted an equal number of hippies, gray hairs and Generation X-ers, was mellow and muddy, thanks to sporadic rainfall.T-shirts beseeched: “Believe In Yourself.” “Hug the World.” “Break the Silence.”

 A slogan on one of the inflatable sculptures hovering over the ski slopes summed up the Ben & Jerry philosophy: “When you meet God be prepared for two questions. What did you do for my children and did you have fun?”

`This was great’

This was the first festival for Pennsylvania shareholders Anna Brindisi and Brett Kane of Bucks County, who made a “significant investment” in Ben & Jerry’s against their stock broker’s advice.

 “I think the stock is under-valued,” said Kane. “Wall Street is impatient.The profits are low, but that’s temporary.”

 Kane had never been to a shareholders meeting before, despite owning stock in a number of other companies.”I was sure it was going to be dull,” he said. “But this was great.”

 Brindisi said the festival cost, rumored to be $1 million, was well worth it.

 “It helps spread the word about Ben & Jerry’s,” she said. “It’s worth the publicity.”


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