- Thread starter Royse
- Start date
i would really like to know if they make a go of it in ten years or so. Would like to think they could,but they have a tough row to hoe. I would really like to know the old fellows reasoning,besides what you read in a feel good story. Its very possible that the old man is a much sharper buisness man than folks give him credit for. Old buildings for instance might be in such a state this was simply his best option for getting out from under them. asbestos insulation or tile on the floors for instance would require a ton of money to be invested by these folks before they could even startup. and he couldnt sell them most likely in their present state. i hope thats not the case, but im leery of anything free. especialy when he could have simply turned the running of the store over to them without gifting it to them. wonder how many will really be able to afford the income taxes on their share? as i say i would like to know they make it,,
There are several references to the family being "paid off" in 3 to 5 years- So apparently he's getting something (maybe he's turning over the operation of the company to the employees, but the company will buy his personal shares over time with profits from the business).
This is a common method to pay off or buy out an owners shares in a private company held through an ESOP plan. By law, the employees have to be allowed to vote on divesture and all vested employees would have to be paid off if the company were sold to a competitor. In this case, the owner will be paid for his shares either by future company profits or by loan proceeds obtained against the ESOP, which ever is the case the payments and interest are all tax deductible to the company. The employees incur no additional tax liabilitie because as plan participants they are already owners, they will pay tax on the gains above distribution at the capital gains rate at retirement or roll their proceeds over into IRA's, the usual penaties apply if proceeds are taken out early. ESOPS are the way to go for privately held, non partnered companies.
PeteTheRookie
Member
There is a Honda Dealership by here that is employee owned. Best darn dealership experience in my life. Pleasant, honest. Fair. Like the staff owns the place! And they do.
The other local dealers have all been bought up by a from the goes by the name of "Ira", aweful.
My bet they continue to prosper
Pete
The other local dealers have all been bought up by a from the goes by the name of "Ira", aweful.
My bet they continue to prosper
Pete
The coffee plant my brother works at went through an ESOP, so far
it's allowed them to grow and take advantage of somethings that the
family owners wouldn't go for. And as an added bonus my brother is
thrilled to have all of his loading docks through the winter, when
the family owned it there was always A Mercedes 300 D blocking one
of the docks whenever the owners were in Florida.
We have Woodman's here in Wisconsin is also an employee owned
store, they seem to be doing alright and holding their own against
the folks from Arkansas. Woodman's is so darn big they have a map
of the store and their selection is overwhelming- you want mustard?
at least 75 varieties, they have a juice Isle that's larger then
the whole beverage department at out local Walmart. So they can do
okay if their leadership is active and works at maintaining what
they have and growing when possible. But if the new leadership
doesn't want to keep pace they will be swallowed up just like any
other business.
UPS was also ESOP for years but the only shareholders were
management, their Christmas bonus was paid in stock.
it's allowed them to grow and take advantage of somethings that the
family owners wouldn't go for. And as an added bonus my brother is
thrilled to have all of his loading docks through the winter, when
the family owned it there was always A Mercedes 300 D blocking one
of the docks whenever the owners were in Florida.
We have Woodman's here in Wisconsin is also an employee owned
store, they seem to be doing alright and holding their own against
the folks from Arkansas. Woodman's is so darn big they have a map
of the store and their selection is overwhelming- you want mustard?
at least 75 varieties, they have a juice Isle that's larger then
the whole beverage department at out local Walmart. So they can do
okay if their leadership is active and works at maintaining what
they have and growing when possible. But if the new leadership
doesn't want to keep pace they will be swallowed up just like any
other business.
UPS was also ESOP for years but the only shareholders were
management, their Christmas bonus was paid in stock.
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