But this small town grocer from Bemidji, Minnesota, decided this Thanksgiving season to retire at the age of 70 from running his two supermarkets and hand over his business to his 400 employees through an ESOP, rather than sell it to the highest bidder, though he had offers a plenty. Kudos to Star Tribune for covering this news of Joe, and letting us know the ins and outs of the story.
There are fundamentally three differences between Joe’s offer to his employees and normal cases of ESOP: The first is Joe had no need to let go of his business, the second is Joe’s business is not running at a loss but at profit, and the third is Joe does not require his employees to put in any money to become owners of the business. His employees are becoming the owners of two successful and running supermarkets that are employing 400 persons, without needing to spend anything upfront, not even a penny. It’s reward for their work from Joe.
He told Star Tribune, “My employees are largely responsible for any success I’ve had, and they deserve to get some of the benefits of that … You can’t always take. You also have to give back.” Joe’s family stands by his decision. His son Jeff, who is an IT expert told ST, “We could have hired a gunslinger from Minneapolis, but that didn’t sit well because the reward wouldn’t go to the proper people.” Jeff would be helping the company, including the two supermarkets, transition to the new employee-owned company Lueken’s Village Foods.
The program would pay back Joe and his family within two to three years while the employees, who would themselves be the owners, would have something to look forward to in their lives for retirement, more than salaries. Lueken holds that the ESOP scheme agrees with his wish to channel profits back into the community through salaries, and through causes that are important to workers of the company, rather than allow the profits to be directed to some absentee corporation.