n FINANCE
When Myles Brown stepped down, he
stayed there.
Equally important was ownership
of the firm as the founders retired. The
partners started that discussion well
in advance. Starting when Ben Brown
became a minority partner in 2010,
the partner group got together period-
ically to discuss the future of the com-
pany’s partnership agreement.
The existing partners trusted each
other to look out for their financial
best interests, and Ben Brown trust-
ed them to do the same for him. Still,
Nor-Cal Beverage
FAMILY FOUNDATION FOR SUCCESS
N
or-Cal Beverage, Inc. is one of few family
businesses that successfully achieve
third-generation leadership and is
currently cultivating its fourth-generation leaders.
Founded by Roy Deary in 1937, Nor-Cal
transitioned to his sons Donald and Roy Grant, Jr.
(Grant) in 1963. Third-generation shareholders,
Don’s and Grant’s seven adult children, now
oversee Nor-Cal, the largest independent co-packer
of teas, ades, juices, waters, and energy drinks west
of the Mississippi.
Shannon Deary-Bell, President and CEO, manages
FAMILY
BUSINESS
SINCE
1937
daily operations with her brother Timothy Deary,
Executive Vice President, Transportation and Logistics,
and their cousin, Roy Grant Deary, III, Executive Vice
TAKE YOUR TIME
President, Marketing and External Affairs.
“Through training and mentoring, we’re preparing
our fourth-generation leadership, and expect
them to earn their positions in the company,”
says Shannon. “Our real strength comes from
working with our employees as an extended family
— together we make it happen as a team, and we
thank them for Nor-Cal’s success.”
42
comstocksmag.com | October 2018
“trust but verify” is a proverb that ac-
countants live by. So in one huddle
among the partners at the Sutter Club,
Ben Brown worried aloud: If the older
partners retained something close to
their full shares right up until retire-
ment, Ben Brown and other younger
partners would have to procure a huge
amount of money in a hurry to buy
the founders out when they left. “Hey,
this thing’s not going to cash flow. It’s
not going to make any sense,” he told
the group.
By 2013, they’d worked out a solu-
tion that’s now company policy. Start-
ing at age 62, a partner’s shares in the
firm are gradually cut until they’re
completely out by age 67. In conjunc-
tion with loans, that enables younger
partners to use their growing shares to
generate cash to pay off the older part-
ners as they leave.
Still, they had to refine that plan:
The founders partners weren’t all sure
they wanted to be completely gone by
67. They’d given up good salaries and
taken significant risks in starting the
firm. Now BFBA was enjoying good
income-earning years. So they nego-
tiated a few years’ grace period, rang-
ing from one to three years. Call it the
founders’ prerogative, but everyone
got onboard.
That partnership agreement is a
key to BFBA’s peaceful handover of
power. Over the years, they’ve seen
other accounting firms fall apart
during a transition because they
couldn’t come to an arrangement that
felt fair to the incoming and exiting
partners.
2286 Stone Boulevard
West Sacramento, CA 95691
916.372.0600
www.ncbev.com
It’s not every day you hear an accoun-
tant adopt the tone of an evangelist.
But Ben Brown has a message for the
founders of companies, particularly of
family firms: “Anyone who’s looking at
transitioning out in the next 10 years