This commentary is by Fred “Chico” Lager, author of the book “Ben & Jerry’s: The Inside Scoop: How Two Real Guys Built a Business with a Social Conscience and a Sense of Humor” (Crown Publishers, 1994). Lager was president and CEO of Ben & Jerry’s Homemade Inc. from 1988 to 1991, the general manager and CFO from 1982 to 1988, and on the board of directors from 1982 to 1997.
The obituary for Kenward Elmslie that was published in VTDigger several weeks ago was a fitting tribute to the poet and songwriter who first moved to Calais in 1953.
Elmslie, who passed away on June 29 at the age of 93, lived an eclectic, successful and generous life — authoring 10 books of poetry, writing a song recorded by Nat “King” Cole, and crafting the lyrics for “The Grass Harp,” a cult-favorite 1971 Broadway show that, despite a run of only seven performances, continues to live on through a cast recording that features Barbara Cook and Elaine Stritch.
Elmslie also founded Z Press, a nonprofit literary publishing company that featured the works of authors associated with the New York School of Poetry, and he made many charitable gifts to needy writers and to poetry and civil rights groups, as well as the town of Calais and the Vermont Land Trust, always maintaining strict anonymity.
Consistent with his approach to philanthropy, Elmslie never drew attention to another notable claim to fame, which went unmentioned in his obituary and is reported here for the first time.
In 1984, Ben & Jerry’s Ice Cream needed to raise $3.5 million to build a new factory in Waterbury for the growing but still fledgling business Ben Cohen and his childhood friend, Jerry Greenfield, had started six years prior in an abandoned gas station in Burlington. I was the company’s general manager and a member of its three-person board of directors attempting to figure out how to go about that, no small task for a barely profitable business posting sales of only $1.8 million the year prior.
Ben’s progressive ideas about the role a business should play in society were still in gestation, but he was far enough along in his thinking to quickly reject the idea of giving up a large percentage of the ownership to a venture capitalist likely to focus strictly on the bottom line. Instead, he wanted the people who had lined up for ice cream at the original scoop shop, and were now buying prepackaged pints in grocery stores, to share in whatever future rewards accrued to the business.
Ben became aware of an infrequently used exemption in federal securities laws allowing for an in-state stock offering, provided all the shareholders were residents of Vermont. The proposed offering had all the hallmarks of today’s GoFundMe and Kickstarter campaigns. Hoping to raise three-quarters of a million dollars in two months, we set the stock price at $10.50 with a requirement to purchase a minimum of only 12 shares. “Almost everyone has $126 they can take a flyer on,” Ben reasoned.
And they did. Just under 1,800 Vermont households purchased stock, many in trust for children and grandchildren. About a third of the investments were for the 12-share minimum, and 73 investors purchased more than 100 shares. By far the largest investment, $21,000 for 2,000 shares, came from Elmslie.
The fact that someone connected to Broadway and the progressive New York City literary scene had made an outlying investment didn’t register with anyone at the company. It wasn’t until 2014 — when I was working on a presentation that attempted to put the 1984 offering in the context of crowdfunding and recently updated securities legislation — that I scrolled down the list of shareholders and came across Elmslie’s name.
Unfortunately, by then he was suffering from dementia, but I did correspond with his good friend, poet Ron Padgett, who wrote, “Kenward believed in supporting Vermont businesses in general, because it is a state he has loved for many decades. He, my wife and I stopped at B&J’s in Burlington when it was just a single shop, and we all came away with a very good impression. Maybe that influenced his decision to invest, but I can’t say for sure.”
Elmslie’s faith in Ben & Jerry’s stood in marked contrast to what most of the professional financial community had surmised about the company’s prospects for delivering a reasonable long-term return on investment. Harlan Sylvester, who ran the Burlington office of EF Hutton and was one of Vermont’s most connected advisers, urged his brokers to be cautious about recommending the stock: “It’s just fucking ice cream — it’s not as if they’ve invented a male birth control pill.”
Elmslie’s interest in the offering, and his overall philanthropic nature, can be traced to his grandfather, Joseph Pulitzer, the publisher of New York World, whose endowment gift funded the prestigious prizes that honor journalism, writing and the arts that bear his name. In 1885, Mr. Pulitzer raised $100,000 from over 160,000 people to pay for the granite base in New York Harbor upon which the Statue of Liberty was placed. Three-fourths of the donors contributed less than a buck, and it very well may qualify as the first successful crowdfunding campaign.
Ben & Jerry’s run as an independent publicly traded company came to an end in 2002 when it was purchased by Unilever, the giant Anglo-Dutch consumer product company, for $326 million. Factoring in numerous splits, the minimum 12-share $126 investment, held for the full 18 years, was then worth $4,697, a compounded annual return of 22%.
It isn’t known how many shares, if any, Elmslie still owned when the buyout was completed, but if he hadn’t previously sold any, his net capital gain would have exceeded three-quarters of a million dollars. Not too bad an investment for a poet who once penned the song, “I Trust the Wrong People.”
This commentary has been updated to correct Harlan Sylvester’s quote.