Just in time for Christmas, a 70-year old retiring Minnesota supermarket owner is giving his roughly 400 employees quite a gift - ownership of his three stores. Instead of selling the stores to the highest bidder, Joe Lueken will freely transfer shares of Lueken’s Village Foods to all his employees based on their length of service and salary through ESOP. The program to transfer ownership from the Lueken family to the employees will begin on January 1, 2013.
An Employment Stock Ownership Program (ESOP) is a stock equity plan that enables employees to acquire ownership in a company. The employees form a trust, which then purchases shares of the company. Employees generally contribute to the trust through payroll deductions. In Lueken’s case, however, he won’t require his employees to pay anything for their shares, effectively giving the company to the employees for free.
He explained his reason for the move: “My employees are largely responsible for any success I’ve had, and they deserve to get some of the benefits of that.” He says he received a number of lucrative offers for his business, but he and his family realize what the supermarkets do for the community, and they believe this will be a better deal for them and the 13,000 residents of Bemidji. “You can’t always take,” Lueken says. “You also have to give back.”
Two of his stores are based in Bemidji, Minnesota while another store is in Wahpeton, North Dakota.
In his retirement, he and his wife, Janice, want to travel, and they hope to leave a lasting legacy. Lueken stresses the importance of “doing the right thing” for people, empowering them to help themselves and others. Last week, he named longtime employee Brent Sicard as the company’s new president and CEO. Sicard started out as an overnight janitor at Lueken’s Village Foods in 1998 and worked his way up from there.
After being informed by his two sons that they were not interested in taking over the business, Lueken and his family came up with the employee stock ownership plan to transfer ownership. “We could have hired a gunslinger from Minneapolis, but that didn’t sit well because the reward wouldn’t go to the proper people,” Lueken’s son Jeff told the Star Tribune.
Lueken has acted like a regular guy even as his business grew, driving vans for the company and hanging out in the break room with the other employees over the years, according to the Star Tribune. “Joe would arrive at 3:30am every morning,” The new CEO Sicard told the newspaper. “No one could outstock Joe. No one could outwalk Joe. No one can outthink Joe. He can walk through a $2 million warehouse and tell you within a few thousand dollars how much is in there.”
Lueken has also been giving to charitable causes for years, helping the Bemidji State University Foundation to give scholarships for students in need.
Employees of the business are naturally pleased with Lueken’s decision. “He’s rockin’ awesome,” said front-end manager Maria Svare, who’s worked for Lueken since 2009. Lueken’s action shows that he puts people first, Svare said, adding that employees will be more engaged in their work since they’ll now be responsible for running a profitable enterprise. “It gives you something to call your own and gives you a more comfortable retirement to look forward to,” she said.
This isn’t the first time a business owner in America has utilized an ESOP to reward employees the entire company. In 2010, an Oregon man celebrated his 81st birthday by giving a big present to his employees. Bob Moore, of Milwaukie, Oregon, gave away his whole-grain production business to the 209 employees who worked for him through an ESOP.