Supermarket Owner Gives Away Stores to his 400 Employees

[glenn1]

I don't believe there's gift tax involved. I'm not an ESOP expert but my basic understanding is that the company uses its own assets to fund the ESOP prior to the owner leaving and then the ESOP shares are divested as a retirement vehicle. That would eliminate any gift tax ramifications as the disbursements are not "gifts" from the owner to the employees.

I'm not an ESOP expert either, but it seems to me if he wanted to gift the employees this way he would have been better off selling the enterprise and giving them the proceeds as cash (or contribution to their retirement plan). It was still nice of him, but the employees now own shares which are likely very illiquid and hard to monetize, and still have all the hassles of actually running the supermarket as a going concern.

 

[SearchMaster]

I'm not an ESOP expert either, but it seems to me if he wanted to gift the employees this way he would have been better off selling the enterprise and giving them the proceeds as cash (or contribution to their retirement plan). It was still nice of him, but the employees now own shares which are likely very illiquid and hard to monetize, and still have all the hassles of actually running the supermarket as a going concern.

Yes, but if he did that then the employees have a windfall of cash and many would likely leave the business, and it might die as a result. By handing out the stock they are incentivized to continue working in and growing the business.

 

[Juror No. 8]

it appears that juror number 8 has confused socialism with communism.

go figure.

LOL.

Socialism = Government steals the wealth of citizens via the threat and use of force and redistributes it.

Communism = Government steals the wealth of citizens via the threat and use of force and redistributes it.

Yes, this seems awfully confusing!

 

[lotus503]

As someone who is in a similar situation they would only pay tax on shares once sold.

I am part owner in the company I work for. Was employee #8, we have 200 now. Because initially the owner could not pay market salary he gave stock, not stock options but actual stock.

Several years later they started a stock option plan and it's what we all get now.

I sold one share last year and had to pay tax on it.

 

[SparkyJJO]

it appears that juror number 8 has confused socialism with communism.

go figure.

They are awfully similar.

 

[3chordcharlie]

LOL.

Socialism = Government steals the wealth of citizens via the threat and use of force and redistributes it.

Communism = Government steals the wealth of citizens via the threat and use of force and redistributes it.

Yes, this seems awfully confusing!

This must be true. If socialism and communism aren't the same thing, how will I know which is black, and which white?

And worse, I'll be completely out of colours!

 

[SheHateMe]

How has this guy's business survived Wal-Mart?

 

[sactoking]

I don't believe that the company has to have cash on hand when the ESOP is started; ESOPs are funded by future earnings. Illiquidity is also not a concern for employees; the company is required to redeem shares at market value for departing stock owners.

 

[FerrelGeek]

Applauds. Sadly, this point will go completely over the heads of the intellectually myopic leftists on this board.

You're sarcasm is moot.

It's his store. He can do as he pleases with it and that includes giving it away. That is pretty much a tenant of those who value both social and economic liberty.

Then again maybe your collectivist point of view can't see how that the ability to own property and keep the fruits of his own productive labor (aka profit) incentivized and motivated him to start a business. A business which he owns and is now freely giving away rather then having someone in government use the threat of force to dictate to him what he could or could not do with his own property and business which he built. Or worse tell him if he can or cannot own a business in the first place and/or decide if he could benefit from the profit such a enterprise has generated over the years so that now he feels economically secure enough to give it all away.

 

[soulcougher73]

LOL.

Socialism = Government steals the wealth of citizens via the threat and use of force and redistributes it.

Communism = Government steals the wealth of citizens via the threat and use of force and redistributes it.

Yes, this seems awfully confusing!

Woah, we got a dumb one here boys. Lets wrangle him in so he doesnt breed with the rest of the flock.

 

[rudder]

What a disgusting socialist pig.

Can you not understand the difference between a private citizen giving his own wealth away versus the government forcing someone to do that?

 

[zsdersw]

It is rather hard to run a business by committee.

Seems to work fine for Woodman's: http://www.woodmans-food.com/

 

[mikeymikec]

I don't often respond in this way to forum threads, but I would respond to virtually everyone on this thread with:

(if it doesn't show, a "not sure if serious" jpeg)

This thread seems to have it all:

- Probable trolling
- Sarcasm
- Probable trolling and sarcasm
- People not noticing sarcasm
- People not noticing attempt at trolling
- Stupidity and attempting to use sarcasm in an attempt to look clever

 

[Incorruptible]

What a disgusting socialist pig.

I know your not serious but socialism is disgusting. socialism needs to be stopped and the people that want it should go to some other country

 

[child of wonder]

Good for him. Too few companies share their success with their employees.

 

[dank69]

I know your not serious but socialism is disgusting. socialism needs to be stopped and the people that want it should go to some other country

I agree. Those fucking peons should never be treated like this. Their reward is the job that the owner blessed them with. The owner is probably part of some abomination of a religion and is just trying to buy his way into heaven now that he is on his deathbed. No sane person would treat the workers that stand between him and bigger profits this way, and it is not representative of the America that I want to live in.

 

[CycloWizard]

I think I would have tried to find the most generous business wise person I could find, among the employees if possible, and give it to him or her. It is rather hard to run a business by committee.

But that would imply a skillset that enables people to become wealthy through work!

 

[1prophet]

He explained his reason for turning over ownership to his employees: "My employees are largely responsible for any success I've had, and they deserve to get some of the benefits of that." He says he received a number of lucrative offers for his business, but he and his family realize what the supermarkets do for the community, and they believe this will be a better deal for them and the 13,000 residents of Bemidji. "You can't always take," Lueken says. "You also have to give back."


In his retirement, he and his wife, Janice, want to travel, and they hope to leave a lasting legacy. Lueken stresses the importance of "doing the right thing" for people, empowering them to help themselves and others.

Most important part, something that many of today's corporate types with their short term profit only matters mentality will never be able to grasp.

 

[JEDIYoda]

But that would imply a skillset that enables people to become wealthy through work!

sounds like a Democrat to me!!

 

[Thump553]

I'm not an ESOP expert either, but it seems to me if he wanted to gift the employees this way he would have been better off selling the enterprise and giving them the proceeds as cash (or contribution to their retirement plan). It was still nice of him, but the employees now own shares which are likely very illiquid and hard to monetize, and still have all the hassles of actually running the supermarket as a going concern.

You're also not a gift tax expert. The donor is legally responsible for and pays any gift tax due, not the recipient.

But you do have the gloomy viewpoint cornered, though.