by: The National Center for Employee Ownership
Source: The National Center for Employee Ownership
Years ago, David Neeleman founded Morris Air, which was later purchased by Southwest Airlines. Neeleman pocketed $20 million through the sale and joined Southwest only to be fired within six months. As part of his severance, he agreed to a five-year 'no competition' agreement, and exactly five years and one day later, announced his new airline venture, JetBlue Airways. Now, five years later, JetBlue, known for its DirecTV screens, leather seats, and friendly atmosphere, consistently turns a profit every quarter while the majors flirt with bankruptcy proceedings.
JetBlue employees are given the opportunity to own a direct stake in their company through the Crewmember Stock Purchase Plan, better known as a Section 423 employee stock purchase plan, or ESPP. This plan allows crewmembers to purchase company stock through payroll deductions biannually at a discount of 15% of fair market value. Eight out of every 10crewmembers participate in the ESPP. In its start-up phase, all employees also received stock options.
Link: JetBlue Airways
Publication Date: 2005-11-01