In the past, some ESOP experts said that carmakers didn’t want their franchisees to have ESOPs due to their complex structures and concerns they’d have to deal with more than one executive.
“I think there’s been an evolution in the thinking of the automakers that these types of companies, that have the culture and care of customer service and loyalty and running efficiently, do really well,” Josephs said. “We’ve broken the ice over the last two decades.”
Today, Van Horn says 386 of its 711 employees are in the ESOP. To qualify for Van Horn Automotive’s ESOP, employees have to be 18 or older and work at least 1,000 hours in a year. Once employees work for one year, they enter into the plan and become fully vested five years after that, Niesen said.
“When you have someone that’s fully vested, they have that much more of an interest in staying because they can just increase their pension that much more,” Teresa Van Horn said.
Jenny Krebsbach, Van Horn Automotive Group’s controller, is one such employee. Krebsbach has worked for the group for 37 years and has been part of its internal ESOP committee since the program launched.
“It’s a big reason why I would stay maybe a little longer or stretch out my retirement,” Krebsbach said. “Obviously, I’m not looking to go find another job.”
For Van Horn, the ESOP also helps to recruit employees.
“The longer we go and the bigger those account values get, the more of a recruitment tool it becomes,” Niesen said. “Because now you can tell somebody, ‘Look, we’ve got people that have $200,000, $300,000, $400,000 sitting there that they didn’t contribute to. Do you want to be part of this?’ ”