Ben and Jerry's Home-Made Ice Cream Essay Example
Ben & Jerry’s Homemade Ice Cream Inc:
Keeping the Mission(s) Alive
A Written Case Analysis by Mr. Aristotle Metin
CASE BACKGROUND
The U.S. Ice Cream Industry
The total retail value of ice cream and related products in the United States was about $9.8 billion in 1990. The superpremium ice cream market held about 9.5% of the ice cream industry in the US.
By 1990, Ben & Jerry’s was a strong # 2 in the superpremium ice cream market and the fifth largest ice cream maker of any type in the United States.
Ben & Jerry’s Home-made Ice Cream Inc.
Incorporated in 1977 by Ben Cohen and Jerry Greenfield, the first Ben & Jerry’s Home- made Ice Cream shop was opened in Burlington with an investment of $12,000. The company was known for “standing for something better than a typical corporation”. Its business mission was primarily to “become a growing force for social change.”
Since its inception, the ice cream company was now gearing for further business growth. It had grown tremendously (9000%) from 1981 to 1997; with a yearly average growth in net income of not less than 12%. Stockholders equity had an average 3-year growth of 20% from 1986 to 1989. In 1990, Ben & Jerry’s Ice Cream was a public traded company.
The 5-to-1 Policy
This compressed salary structure means the highest paid employee (including corporate officers) will be paid at the rate no more than five times what the lowest paid employee could earn for an equivalent work week. It was applicable to regular, full-time employees with a regular work week of at least 30 hours. The ratio was based on a 48-hour and 52 week employment scheme. For example, if the hourly rate were $6.50 then the maximum annual salary payable would be $81, 120 ($6.50 x 48 hours x 52 weeks x 5). On the other hand, the compensation of corporate officers may be a combination of salary and performance bonus. Combined, these two cash compensation must, however, be within the limitation of the 5-to-1 ratio.
Keeping the Mission(s) Alive
A Written Case Analysis by Mr. Aristotle Metin
CASE BACKGROUND
The U.S. Ice Cream Industry
The total retail value of ice cream and related products in the United States was about $9.8 billion in 1990. The superpremium ice cream market held about 9.5% of the ice cream industry in the US.
By 1990, Ben & Jerry’s was a strong # 2 in the superpremium ice cream market and the fifth largest ice cream maker of any type in the United States.
Ben & Jerry’s Home-made Ice Cream Inc.
Incorporated in 1977 by Ben Cohen and Jerry Greenfield, the first Ben & Jerry’s Home- made Ice Cream shop was opened in Burlington with an investment of $12,000. The company was known for “standing for something better than a typical corporation”. Its business mission was primarily to “become a growing force for social change.”
Since its inception, the ice cream company was now gearing for further business growth. It had grown tremendously (9000%) from 1981 to 1997; with a yearly average growth in net income of not less than 12%. Stockholders equity had an average 3-year growth of 20% from 1986 to 1989. In 1990, Ben & Jerry’s Ice Cream was a public traded company.
The 5-to-1 Policy
This compressed salary structure means the highest paid employee (including corporate officers) will be paid at the rate no more than five times what the lowest paid employee could earn for an equivalent work week. It was applicable to regular, full-time employees with a regular work week of at least 30 hours. The ratio was based on a 48-hour and 52 week employment scheme. For example, if the hourly rate were $6.50 then the maximum annual salary payable would be $81, 120 ($6.50 x 48 hours x 52 weeks x 5). On the other hand, the compensation of corporate officers may be a combination of salary and performance bonus. Combined, these two cash compensation must, however, be within the limitation of the 5-to-1 ratio.