Try this idea to lower turnover
PLYMOUTH – About 600 employees at the Van Horn Automotive Group are set to become part-owners in the second-generation business.
The company, which owns a dozen eastern Wisconsin car dealerships and a financing business, will soon hand over a 30 percent ownership stake to its full-time employees through an employee stock ownership plan, or ESOP.
Co-owner Chuck VanHorn said he hatched the idea while considering a long-term succession plan for the business, which his father, Joe, founded in Plymouth 50 years ago.
The chain today stands as the largest used car dealer in the state based on sales volume, but with no children involved in the business or any potential successor waiting in the wings, the 55-year-old VanHorn decided to hand over a portion of the business to his employees.
“We’ve been pretty successful…you might as well pass it on to the people who helped get you there,” said VanHorn, who bought his dad’s Plymouth car lot in 1987 and later expanded it throughout the region.
An ESOP is a type of retirement plan that allows employees to acquire an ownership interest in the business with no out-of-pocket costs. The plan also benefits employers by lowering their taxes.
Under VanHorn’s plan, a 30-percent equity stake will be held in a trust, with the value of the ownership shares rising and falling based on the company’s performance.
Employees will automatically become trust beneficiaries and receive a payout when they leave or retire based on their time of service and pay grade.
VanHorn, who also provides employees with 401 (k) plans, claims the ESOP would be the first among Wisconsin car dealers.
