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FROM: THE ALBANY TIMES-UNION NEWSPAPER
BCCode=HOME&newsdate=1/30/2005
Tribe To Give Workers A Bonus
Oneidas create program similar to stock options to reward employees
By WILLIAM KATES, Associated Press
First published: Sunday, January 30, 2005
VERONA -- The Oneida Indian Nation, which is building an economic empire with
profits from its Turning Stone casino, has created a kind of stock option for
its 4,500 employees that is the first of its kind among Indian tribes.
While it is common for tribes to share profits among its members through
distribution payments, National Indian Gaming Commission spokesman Shawn Pensoneau
said doling out performance-based payouts to employees -- especially
non-Indians -- makes the Oneida program "interestingly unique."
The 1,000-member tribe employs more than 4,000 non-Indians.
"It's definitely at the forefront of business thinking in Indian country,"
said John Carpenter, program coordinator for Northern Arizona University's
Center of American Indian Economic Development, which provides technical support
and services to Indian businesses. "Other tribes will be watching closely to see
if it works."
The nation wanted to replicate a stock option program but is not a public
corporation so could not offer shares of stock, said Eric Facer, a Washington,
D.C., tax attorney hired by the nation to develop the program.
"It's really like what you would find anywhere in corporate America," Facer
said. "It's nothing new. The challenge -- and what's different -- is that we
couldn't offer stock so we had to think up something else."
So, instead of receiving shares of stock, employees are assigned a percentage
of the nation's net worth -- called Equity Participation Units -- based on
their position and performance.
The EPUs were determined by calculating the total value of all the nation's
various businesses, estimated at $1 billion. The value was divided among a
finite pool of 200 million EPUs -- much like a corporation issuing 200 million
shares of stock.
So the first issue of credits for fiscal 2003 -- which workers will receive
next month -- will carry a base value of about $5 a unit. The unit itself has
no value and cannot be redeemed.
However, if the nation's value increases, for example, by 10 percent, when
the 2004 financial picture is completed, then every 2003 unit an employee holds
grows by 10 percent to $5.50.
If there is no growth, the employee "has no financial exposure" and loses
nothing, said Facer.
Facer estimated that if the Oneida Nation's value continues to increase 8
percent to 10 percent a year, it will mean an extra $1,000 or so for the typical
hourly worker who holds onto their units for three years.
"It's a very exciting idea to be able to earn money without putting anything
in," said Marie Ames, 60, of Verona, a bingo guest service representative who
has worked at the casino since shortly after it opened in 1993. "How can you
go wrong? The longer you work, the better it gets."
Ames said she planned to use her earnings from the program to help her two
grandchildren go to college.
The Oneidas do not release financial figures for their businesses, which also
include a string of 12 gas station/convenience stores that sell tax-free
gasoline and cigarettes; a charter airline; Indian Country Today, a national
newspaper; a video and animation production company; an electronic slot machine
manufacturing business; three marinas, a campground and an RV park.
In 2002, it was estimated that Turning Stone alone made $70 million in
profits. It attracts more than 4 million visitors a year and is just completing a
$343 million expansion, adding a new 19-story tower hotel, an events center and
two championship golf courses.
Nation spokesman Mark Emery said the nation also pays annual employee
bonuses, worth $4 million last year.
Employees must wait at least three years to cash in their windfall, which
means the first payouts will come in 2007. And, workers cannot build their pot
for more than seven years. After that, payouts occur automatically for the
expired year.
Facer said the program is not for the nation's top executives and managers.
Seventy-percent of the units will be distributed to hourly workers.
GROWING NATION
What: Oneida Indian Nation of New YorkWhere: Has purchased nearly 17,000
acres of former reservation land in Oneida and Madison counties
Members: 1,000
Employees: 4,500; less than 10 percent are Indian
Casino: Turning Stone Casino and Resort, located in Verona, 35 miles east of
Syracuse; Includes 279-room luxury hotel; 287-room tower hotel, 98-suite
hotel, 800-seat showroom, 5,100-seat events center, three 18-hole championship golf
courses and 120,000-square-feet of gaming space
Other holdings: 12 SavOn gas station/convenience stores; Four Directions Air
Charter Service; Standing Stone Gaming; Indian Country Today newspaper.
Source: Oneida Indian Nation
This message is reprinted under the Fair Use
Doctrine of International Copyright Law:
************************************************** *************
FROM: THE ALBANY TIMES-UNION NEWSPAPER
BCCode=HOME&newsdate=1/30/2005
Tribe To Give Workers A Bonus
Oneidas create program similar to stock options to reward employees
By WILLIAM KATES, Associated Press
First published: Sunday, January 30, 2005
VERONA -- The Oneida Indian Nation, which is building an economic empire with
profits from its Turning Stone casino, has created a kind of stock option for
its 4,500 employees that is the first of its kind among Indian tribes.
While it is common for tribes to share profits among its members through
distribution payments, National Indian Gaming Commission spokesman Shawn Pensoneau
said doling out performance-based payouts to employees -- especially
non-Indians -- makes the Oneida program "interestingly unique."
The 1,000-member tribe employs more than 4,000 non-Indians.
"It's definitely at the forefront of business thinking in Indian country,"
said John Carpenter, program coordinator for Northern Arizona University's
Center of American Indian Economic Development, which provides technical support
and services to Indian businesses. "Other tribes will be watching closely to see
if it works."
The nation wanted to replicate a stock option program but is not a public
corporation so could not offer shares of stock, said Eric Facer, a Washington,
D.C., tax attorney hired by the nation to develop the program.
"It's really like what you would find anywhere in corporate America," Facer
said. "It's nothing new. The challenge -- and what's different -- is that we
couldn't offer stock so we had to think up something else."
So, instead of receiving shares of stock, employees are assigned a percentage
of the nation's net worth -- called Equity Participation Units -- based on
their position and performance.
The EPUs were determined by calculating the total value of all the nation's
various businesses, estimated at $1 billion. The value was divided among a
finite pool of 200 million EPUs -- much like a corporation issuing 200 million
shares of stock.
So the first issue of credits for fiscal 2003 -- which workers will receive
next month -- will carry a base value of about $5 a unit. The unit itself has
no value and cannot be redeemed.
However, if the nation's value increases, for example, by 10 percent, when
the 2004 financial picture is completed, then every 2003 unit an employee holds
grows by 10 percent to $5.50.
If there is no growth, the employee "has no financial exposure" and loses
nothing, said Facer.
Facer estimated that if the Oneida Nation's value continues to increase 8
percent to 10 percent a year, it will mean an extra $1,000 or so for the typical
hourly worker who holds onto their units for three years.
"It's a very exciting idea to be able to earn money without putting anything
in," said Marie Ames, 60, of Verona, a bingo guest service representative who
has worked at the casino since shortly after it opened in 1993. "How can you
go wrong? The longer you work, the better it gets."
Ames said she planned to use her earnings from the program to help her two
grandchildren go to college.
The Oneidas do not release financial figures for their businesses, which also
include a string of 12 gas station/convenience stores that sell tax-free
gasoline and cigarettes; a charter airline; Indian Country Today, a national
newspaper; a video and animation production company; an electronic slot machine
manufacturing business; three marinas, a campground and an RV park.
In 2002, it was estimated that Turning Stone alone made $70 million in
profits. It attracts more than 4 million visitors a year and is just completing a
$343 million expansion, adding a new 19-story tower hotel, an events center and
two championship golf courses.
Nation spokesman Mark Emery said the nation also pays annual employee
bonuses, worth $4 million last year.
Employees must wait at least three years to cash in their windfall, which
means the first payouts will come in 2007. And, workers cannot build their pot
for more than seven years. After that, payouts occur automatically for the
expired year.
Facer said the program is not for the nation's top executives and managers.
Seventy-percent of the units will be distributed to hourly workers.
GROWING NATION
What: Oneida Indian Nation of New YorkWhere: Has purchased nearly 17,000
acres of former reservation land in Oneida and Madison counties
Members: 1,000
Employees: 4,500; less than 10 percent are Indian
Casino: Turning Stone Casino and Resort, located in Verona, 35 miles east of
Syracuse; Includes 279-room luxury hotel; 287-room tower hotel, 98-suite
hotel, 800-seat showroom, 5,100-seat events center, three 18-hole championship golf
courses and 120,000-square-feet of gaming space
Other holdings: 12 SavOn gas station/convenience stores; Four Directions Air
Charter Service; Standing Stone Gaming; Indian Country Today newspaper.
Source: Oneida Indian Nation
