Tribe devises rewards program for workers

William Kates

Monday, Jan. 31, 2005 | 9:21 a.m.

VERONA, N.Y. -- 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, too, 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.