ESOP
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ESOP: Employee Stock Ownership Plan
What is an ESOP?
An employee stock ownership plan (ESOP) is a way in which employees can own shares of the company at which they work. In the United States, ESOPs are a very common form of employee ownership. They have been growing in strength since about 1974. Over 11,000 companies have an ESOP in place, and nearly 9 million employees are involved in them.
ESOPs have been studied in depth for nearly 35 years. These studies have proven that ESOPs can dramatically increase company performance in many areas. They foster an “ownership culture” in the company which can make employees feel and act more like owners and less like employees. Other benefits ESOPs may provide are:
- Significantly increased retirement benefits
- Increased retention and less turnover of good employees
- Greater ability to recruit new employees
- Associated with greater stability of employment.
- Linked to higher rates of survival among companies.
What’s interesting about employee ownership isn’t only that it’s widespread, but that it also turns up in a disproportionate number of influential and innovative companies.
- Nearly 80% of the corporations on Fortune’s “100 Best Companies to Work For” list.
- One third of the company’s on Inc. magazine’s list of the 500 fastest growing privately held businesses.
Ownership isn’t just a benefit, it’s a responsibility and the basis for a company to grow and thrive. The transition to employee ownership is only the starting point. Employees; now employee-owners, must begin to think and act like owners and fully understand the opportunities before them.
A phenomenon that exists in ESOP companies is called the “Equity Attitude”, where employee owners approach day-to-day work with “This is our company, and we will do whatever necessary to help it succeed.”
Timeline
Lueken’s Village Foods will start 2013 as a new minority-share ESOP with a goal of 100% employee-ownership within 5 years, in which time the ESOP will purchase the business through a series of transactions.
Why an ESOP?
Joe Lueken has always run Lueken’s Village Foods with an entrepreneurial spirit and has been loyal and dedicated to employees and their development as well as support of the community. In recent years, many offers to purchase the stores have been made, but accepting those offers would have come at a price that would be in conflict with that loyalty and support. New ownership, from outside Bemidji, would likely have meant new management and a reduced focus on our community since profit dollars would have flowed out of our town.
In contrast, employee-ownership at Lueken’s means increased opportunity for employee-owners, their families, and continued support of our community. When profits stay local, everyone wins.
Comment
Norman Miller
September 3, 2012 at 3:39 pmHi,my great grandparents were Anton and Bertha Lueken. Lived near Willmar Mn.
Looking for geneology connections.
Hope to hear from you. That’s a great thing you’re doing for your employess.
Laurie Swenson
September 4, 2012 at 6:56 pmExciting news for Lueken’s, employees and the community.
Jen Widseth-Coppe
September 4, 2012 at 7:32 pmI started coming to Lueken’s as a kids when “up at the cabin”. Now, 40 years later, Lueken’s is still our first choice when in the Bemidji area. In a world of layoffs, disillusionment, everyone trying to get ahead, and lack of employee and employer commitment, your Labor Day spirit is something we ALL should strive for. Joe, you are what makes the American Dream live on. You’re just “good people”. Thanks for making me smile during my own workday. I look forward to visiting with the new owners the next time I’m in town!
Bobbe Anderson
November 26, 2012 at 3:55 pmWhat a truly great gift you have given not only your employees, but the community it serves as well.
You definately need to be a TED presenter.
Linda Kranz
November 26, 2012 at 5:28 pmI just read the article about making the employee’s the ‘owners’. How cool is that that an owner of a business(s) thinks that much of his employees. I also work for that type of an company, but our owner’s family is too large to leave their famliy ran business(s) to their employees, but none the same I will remain until I retire. Not too many people can say that about their employer. Congratulations to all concerned. Merry Christmas.
David Stroebel
November 26, 2012 at 9:28 pmWe heard all the way from New Jersey that you are giving your supermarkets away to your employees. You are an awefully nice fellow to do something like that. God bless you.
Jon R. Enerson
November 27, 2012 at 1:52 amMy dad was born in Bemidji in 1929
I have only been to vist Bemidji once as a child. My dad is gone now, but he was a good and honorable man.
Now I hear of Joe Lueken, another good and honorable man.
Is there something in the water up there that creates such men?
Congratulatons Mr. Lueken and may God Bless you and your family and all the good people of your stores.
This country is stronger today because of folks like you.
me human
November 27, 2012 at 4:38 amWOW! What a great man! I never lost faith in humanity because of people like Lueken. I do not know you sir, I have never been in your town since I’m from Pennsylvania, but I truly believe that you should receive Man of the Year Award from Time magazine for what you did. God bless!
D Russell
November 27, 2012 at 2:20 pmA model after my own heart. Wonderful. It is so nice to see there are still a few people who resist the greed which is so quickly diminishing this country. I hope your own attitude to become infectious.
Jonah White
November 28, 2012 at 3:02 amDear Mr. Lueken,
My name is Jonah White and I currently live in Bellingham, WA. I came across this story while on my homepage today. In short, this story is wonderfully inspiring! It’s refreshing to know there is still honest, respectful, and caring people in the business world. Thank you for honoring those who have helped you achieve personal success by affording them the opportunity for ownership as you move into the next phase of your life. Congratulations, Mr. Lueken! You are the kindest of beings. Best of luck and well-wishes…
Mari Wilson
November 28, 2012 at 2:32 pmJust read about what Mr. Leukens is doing online. Can’t say it any better than Jen here above me–fantastic! In a time where corporations only care about upper management pay, bonuses and excess combined with squeezing the working man for every last drop of blood it is wonderful to see this kind of thing happening. I totally agree with the philosophy of ESOPs and the positive effect on the workplace they have. I am one who believes there is no better “shareholder” than the American worker. God Bless you Mr. Leukens, you give me renewed faith in business’ ability to “do the right thing.”
Mari Wilson
November 28, 2012 at 2:33 pmOh gosh–transposed the letters in your name & spelled it wrong–sorry! :p
Karl Maloney
November 28, 2012 at 5:13 pmI came across this story this morning and I take my hat off to Mr. Leukens, and his family, for doing such a truly great thing. Not only do the employees benefit but so does the community, which is awesome. This sort of trend needs to be contagious and catch on and show “big business” what it truly means to own a business and do the right thing and think beyond pocketing profits, which would leave the community if owned by outsiders.
I work for a big supermarket chain and it’s all about profits and never the employee who does all the work and interacts with the customer and helps to encourage customer loyalty. Where would a company be without these dedicated workers who give and receive as little as the company can.
Have a wicked awesome retirement Mr. Leukins and know that you have a legion of people supporting your generous decision.
Frances Hedblom
November 28, 2012 at 6:56 pmI used to work at Leukens back when I went to Bemidji State. I was very sad to leave there when my college aspirations took me elsewhere. I now live in Rochester and work at Mayo, and while this is also a great institution to work for I must say there is nothing out there that comes close to the family that I had there at Leukens. The quality and service to customers has not been met at any grocery store or business that I have come across yet! Thanks for the many years of service
Noreen McGinnis Campbell
November 29, 2012 at 2:59 pmCongratulations, Mr. Leukens for finding a way for everyone to win and for you to pass on your legacy. I am also a grocery store owner and I admire your willingness to create the plan for success. Wishing all of you the best.
Gary Thayer
January 1, 2013 at 2:27 pmJoe, you are a man among men, the superior example of a great man, wish we had many more Joe’s among us!!
Brad Bayer
March 31, 2013 at 7:01 pmDear Mr. Leuken,
I read your story of hope and generosity online up here in Canada this morning, Easter Sunday.
I feel compelled to tell you that you inspire me. At my age, 45, you have shown me that there is still lots of time to do ‘great things’. You’ve inspired many to be better men.
Enjoy your retirement.