In the past, some ESOP experts said they didn’t want franchisees to have ESOPs out of concern that automakers would have to deal with complex structures and multiple executives.
“I think there’s been an evolution in the mindset of automakers that this kind of company, with a culture of customer service and loyalty and efficient operations and care, is really doing well,” Josephus said. We have broken the ice in the last 20 years.”
Today, Van Horn says 386 of its 711 employees are in the ESOP. To qualify for his ESOP at Van Horn Automotive, an employee must be at least 18 years old and work a minimum of 1,000 hours per year. Once the employee has served his one year, the employee enters the plan and then becomes fully vested five years later, Mr Niesen said.
“When you have people who are fully vested, they’re much more interested in staying because they can increase their pension by that much,” Teresa Van Horne said.
Jenny Krebsbach, controller at Van Horn Automotive Group, is one such employee. Krebsbach has been with the group for 37 years and has been a member of her ESOP committee inside since the program’s inception.
“That’s a big reason why I’d probably stay a little longer or postpone my retirement,” Krebsbach said. “Obviously, I’m not going to look for another job.”
For Van Horn, the ESOP also helps recruit employees.
“The more time passes and the greater the value of the account, the more recruiting tool it becomes,” Niesen said. “Because you can say to someone, ‘There are people who have $200,000, $300,000, $400,000, and they have something they don’t contribute. Would you like to be part of this?’ is. “