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‘You Also Have to Give Back’: Retiring Minn. Man Gives Away Business to His Employees

Nov. 28, 2012 11:00pm Becket Adams

Joe Lueken Transfers Ownership of his Business to Staff via Employee Stock Ownership Program

Joe Lueken (Lueken’s Village Foods)

After spending nearly 46 years building and running his successful Lueken’s Village Foods chain of grocery stores, Joe Lueken, 70, announced earlier this month that he is giving away his business to his nearly 400 employees.

“My employees are largely responsible for any success I’ve had, and they deserve to get some of the benefits of that,” said Lueken. “You can’t always take. You also have to give back.”

Yup, he’s literally giving away his three stores (two in Bemidji, Minn., and a third in Wahpeton, N.D.) to his staff.

“[H]e and his family will start transferring ownership of the three-store chain on January 1 to an ESOP (Employee Stock Ownership Program), in which each employee will own stock. The number of shares will be based on their salary and years of service,” ABC News reports.

(Facebook)

When Lueken, the son of a baker, was asked why he chose to give away his business rather than sell it, he answered by saying it “was the right thing to do.”

“He considered other options, including selling out to a private buyer; but when he talked to his family about it, his wife and four sons agreed that handing it off to the employees made sense, considering how much his employees, past and present, had done for him,” ABC News notes.

“It wasn’t just the best option: It was the only option,” said Lueken, adding that it was best for the community.

(YouTube)

But this is not the first time Mr. Lueken’s uncommon generosity has benefitted Bemidji. Indeed, according to Minneapolis Star-Tribune, his kindness and willingness to give back has made him something of a local legend:

Lueken is a staunch supporter of several local charities and causes, including the Bemidji State University Foundation.

In the 1990s, around the same time Lueken’s Parkinson’s disease was diagnosed, he made a generous donation that helped that foundation give full scholarships to needy students.

An early recipient went on to become a brain surgeon, and in 2007 he repaid Lueken by assisting in an operation to implant electrodes in his brain, slowing the tremors that were making life difficult. He still shakes some, but the former baker jokes that it helps him dispense sugar onto his store’s doughnuts.

Earlier this week, Penny Echternach, executive director of the local Sanford Health Foundation, showed up at the store and had Lueken paged.

“I just wanted to give you this and a hug,” she said, presenting a gift basket, a thank-you for helping the local hospital buy a robotic surgery device.

“He’s the most generous man and such a neat guy. He gives back to the community in so many ways,” Echternach said, though, in keeping with his wishes, she wouldn’t say how much he’d given.

Leuken, who says his retirement plans will be split between traveling the U.S. with his wife and seeing his grandkids, will be succeeded as CEO by Brent Sicard, an employee who started in 1998 as night janitor and worked his way up the ladder.

Follow Becket Adams (@BecketAdams) on Twitter

Featured image courtesy Lueken’s Village Foods

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Comments (77)

Pat Alexander
Posted on November 29, 2012 at 7:05am
Nice thought.

But this idea probably won’t end well. Employee owned companies seldom survive long.

Hopefully this one will, but the chances are very, very slim. Made even less by no one actually having ANY “Skin in the game.”

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- Kregneva
  Posted on November 29, 2012 at 8:41am
  Well Mr. Romney, you have your facts backwards. ESOP is exactly what “skin in the game” means, it means the entire team rises and falls based on how they compete – and when everyone has a vested interest they weed out the slackers.
  
  When Bain takes over a factory the first thing they do is remove the rank and file workers incentives. Everything is switched around to to benefit Bain investors, and the fate of the business becomes an economic abstraction. Succeed or Fail, Bain investors profit!
  
  An ESOP – on the other hand has to constantly improve and innovate and cannot stand waste and laziness. People create jobs and grow wealth gradually and evenly, so getting “rich” takes a long time. It also requires cooperation, compromise and an even keel with good morale.
  
  Report this comment
- whatdoibelieve
  Posted on November 29, 2012 at 8:59am
  @Kregneva
  
  There is a difference between an investment that you put money into vs an investment that someone else puts money into.
  
  Think of it this way. If you went to Vegas with $100 of your own money you would use it much more wisely than if you went to Vegas with $100 that I gave you. Because it isn’t your skin in the game.
  
  The company owner, although a very nice gesture, gave each employee a portion of HIS profit in the ESOP. So they aren’t contributing a dime to it. The other issue is now you have 400 owners with competing ideas of what is the best way to run the company vs 1 owner with a singular vision and direction.
  
  It would be great to see a follow-up to this story in a year or two to see if they succeed or fail. I hope they succeed but most likely they will learn it is a lot harder than they think…
  
  Report this comment
- Xplorer
  Posted on November 29, 2012 at 9:59am
  Hi Pat,
  
  Our local Hy-Vee is employee owned and that grocery chain has been around for longer than I remember. Also, the power companies in Nebraska are publicly owned and have some of the lowest rates in the country.
  
  Report this comment
- Kregneva
  Posted on November 29, 2012 at 10:26am
  ESOP-controlled SAIC and Booz-Allen Hamilton are doing quite well in my neck of the woods. They are both very competitive and proud of it. Their HR departments say ESOP participants earn 5% to 12% more in wages and own three times the retirement assets as workers in comparable non-ESOP companies like Raytheon and Lockheed-Martin.
  
  Every year more than half of the “Fortune 100 best companies to work for” are ESOP.
  
  Report this comment
- OutOfTheAether
  Posted on November 29, 2012 at 10:58am
  In Oregon, the owner to Bob’s Red Mill did the same thing two or three years ago – sold his company to the employees. The business is still doing great.
  
  Report this comment
- FlamingFartSyndrome
  Posted on November 29, 2012 at 11:15am
  I definitely would like to see a follow up on this story. Im sure there will be those who step up and take on more responsibilities as well as those who realize they cant be fired and slack off. Either way it makes for an interesting experiment, please keep us updated Blaze!
  
  Report this comment
- Strait Talk Express
  Posted on November 29, 2012 at 5:24pm
  I got into an ESOP and it was like a cult. Even the secretaries were expected to learn about customer services, just in case we had a phone call to make or answer a question politely and all. It was like total quality management and like ISO all the time, and they all seemed to absorb it like mindless puppets. When I left they made me cash in my shares, too and it was only like five shares worth 250 dollars after 6 months there. But people that stay there (i.e, workaholics) really love it.
  
  Report this comment
Hoax And Chains
Posted on November 29, 2012 at 6:54am
Whoa. Hold on a minute! You mean he’s not giving his hard labor to the Government? Would they not know better how to share this wealth? Just wait until King Obama hears of this!

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antann
Posted on November 29, 2012 at 6:21am
And now his employees will be responsible for Obamacare costs.

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gtr-rmn
Posted on November 29, 2012 at 5:19am
Grocery business is a low paying profession with long hours if you are in management. I wish I would of worked for this man. You don’t see many Independent grocers anymore. –

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- ONLY4UANDME
  Posted on November 29, 2012 at 6:20am
  But I bet you see your share of greedy obnoxious food stamp customer’s demanding you get their shrimp while they punch the lights out on their baby daddy girlfriend. At least I do.
  
  Report this comment
ColoradoMaverick
Posted on November 29, 2012 at 5:06am
That’s awesome! And I thought according to Obama and his ilk, that business owners are all greedy and selfish bastards.

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- November29
  Posted on November 29, 2012 at 5:15am
  I think if you really looked at business owners, the vast majoity would be closer to this guy than they are to the left’s caharacterization of them. Read fresh political commentary at: http://smallcraftadvisorychronicles.blogspot.com/
  
  Report this comment
- SimpleTruths
  Posted on November 29, 2012 at 1:05pm
  I’m about as far left as they come – AND a small business owner, a very successful one at that. I do not think the left. or Obama, thinks about small business they way you think they do.
  
  Try reading, listening, and watching something other than the conservative echo chamber.
  
  Report this comment
TreeTrimmerJim
Posted on November 29, 2012 at 3:24am
I noticed they misspelled the name of the town. Its winter… the name is spelled Burrrrr midji

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Eyeball
Posted on November 29, 2012 at 1:42am
Give back? Doesn’t the knuckle head understand that he has been giving them a livilhood all those years? What are they going to give him back? Nothing. What a dufus.

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- DRSAVAGE24
  Posted on November 29, 2012 at 2:03am
  There’s the narrative that too many people buy into. You’re right, he’s been giving back by providing products people want for several years AND by providing employment for people so they can support their families. That is giving back. I have a hard time criticizing his generosity, though. All that should show is that we don’t need government to force us to be generous and we can find a way to serve one another by our own free will.
  
  http://www.youtube.com/watch?v=GTQnarzmTOc
  
  A few of you neo-cons, RINOs and liberals could learn from this video.
  
  Report this comment
- TreeTrimmerJim
  Posted on November 29, 2012 at 2:38am
  The found and cultivated customers who wanted his products because they served them.
  He made money providing those product.
  His employees made and income to support their needs and enjoyed working for the company.
  He made it a practice of providing support for his community.
  
  Not all of us have the imagination, knowledge and persistence to start a business. Fewer still have enough of those same traits and skills to keep a business going.
  
  Good help is hard to find. Good business owners are even more difficult to find. Every rural community needs more businesses.
  
  Report this comment
- shorelineliz
  Posted on November 29, 2012 at 2:57am
  You’re the Dufus. This guy is awesome. Crown of Gold on his head. great story.
  
  Report this comment
- rickroland
  Posted on November 29, 2012 at 3:01am
  In my opinion, it’s not so much “give back” as it is he is giving more to those that also (like him) helped keep the business there and expanding, etc., as he gets ready to walk out the door.
  
  Maybe “give back” isn’t the more communicative of words to describe what he is doing, but what he is doing is far above what is right and proper and he should be lauded for doing this.
  
  Report this comment
- Gorp
  Posted on November 29, 2012 at 3:23am
  @Eyeball: You are just trying to be funny. Right? Unless you lay awake at night and think up stupid things to say about people.
  
  If you are trying to be funny: Ha Ha Chuckle Chuckle. If not they your “Eyeball is of the blind nature.
  
  Report this comment
- SimpleTruths
  Posted on November 29, 2012 at 11:15am
  It is clear that you have no idea of what running a business is all about. I do and my partners and I are in the process of moving the company to an employee owned status. The employees pay us out our equity over time, they in turn get paid out when they are vested and hit a certain age. It is in thier best interest to make good hiring decisions, good business decisions and keep the business running profitably so they get paid out their equity. They all have skin in the game.
  
  Report this comment
Beachmastermax
Posted on November 29, 2012 at 1:18am
What he did is like throwing a piece of meat into a pack of ravenous wolves and expecting them to work it out. I hate to think of how many of these former friends will be involved in lawsuits and enemies before this is over. Maybe he is getting revenge. Remember owning 10% of a liability is not good. Is this business an asset?

Why not just put it on the market, sell it (if it is not a liability), disperse the cash and let everyone go their own way?

No, there is trouble a brewin’.

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- SimpleTruths
  Posted on November 29, 2012 at 12:00pm
  Why do assume there is no secession plan? The guy ran a successful business for decades, you think he just walked out the door one day and threw the keys behind him? Give him some credit.
  
  Report this comment
Jerry Frey
Posted on November 29, 2012 at 1:08am
This man is a fine example for others to follow.

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- Ragnars Repos
  Posted on November 29, 2012 at 1:50am
  “You can’t always take. You also have to give back.”
  
  What, did he steal something? I thought the article said he worked on the stores for decades, but…
  
  It’s his business, so he can do whatever he wants with it.
  
  The message he is sending to the unwashed about “giving back” (and all that it implies) is a dangerous one.
  
  Altruism + government = 150+ million dead people just last century.
  
  This sort of thing looks just peachy on the surface, but it’s effect is deadly.
  
  I know, it doesn’t ‘feel’ like it’s a bad thing to many of you, but I’d bet it didn’t ‘feel’ bad to most of the altruistic/dead millions either, in the beginning.
  
  Report this comment
- encinom
  Posted on November 29, 2012 at 2:48am
  The message he is sending is that he understand no man is an island unto themselves. Corporations succeed on the strength of their employees. Loyal employees work harder, generate more profit and good will with the community. While he planted the seed for a successful business, he didn’t build it alone, the workers helped, aided by the education they receive in public schools. Supplies traveled to the store on roads planned and paved with government oversite. Local police and fire depts. kept his property safe. This owner understands what Obama was talking about.
  
  Report this comment
- RubberBandEffect
  Posted on November 29, 2012 at 9:23am
  Ragnars, you must be a profoundly unhappy person. Altruism is one of the very best of human qualities. Try doing something good for someone. If feels good and makes the world a better place. I like this business owner because he realizes the value of community.
  
  Report this comment
SCARY
Posted on November 29, 2012 at 12:51am
I’m so sick of “Giving Back”
No!..It’s called GIVING!
This “Giving Back”BS is to make people think that they shouldn’t be as grateful as they should because,obviously you only got what you got because somebody gave it to YOU!
IM SO SICK OF IT!

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- catty
  Posted on November 29, 2012 at 10:19am
  jerk
  
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- SimpleTruths
  Posted on November 29, 2012 at 11:18am
  How do you look in the mirror with that much hate in your heart?
  
  Report this comment
Diane TX
Posted on November 29, 2012 at 12:34am
Good going Mr. Lueken! I hope that it works out for the new owners. Things will be different for them however, because now they have a stake in whether or not the business makes a profit.

Obama Care could present a challenge to them.

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Trance
Posted on November 29, 2012 at 12:30am
Walkabout
Posted on November 29, 2012 at 12:14am

I have suggested to union people that instead of striking that they buy up the company stock. they say it is impossible. !st they don;t have to buy 100% but just 51%. Second with even 20% they could get directors appointed to the board who could have a say in the CEOs salary etc.
———–

I worked for United Airlines for 20 years. We had an ESOP that gave the employees 55% ownership, and a guarantee of no layoff in exchange for 20% of my wages for 7 years, or around $120,000. After the ESOP period ended United Airlines filed for bankruptcy, making my stock worth zero. Then the Iraq war started. Our contract also said that if a war had a devastating effect on company profits, then United Airlines could lay off workers. I was on vacation when the Iraq war started, and was layed off before my vacation ended.

I understand that sometimes bad things happen, but what United Airlines did was nothing more than legal robbery. I was fortunate in that I had a pretty firm grasp on the character of United Airlines, so I never expected to see the investment pan out from the start. It was mostly the union’s fault for selling out the members from the start (they bussed in the kitchen workers that had been sold to a different to vote on the ESOP even though they would never be a part of the contract in exchange for guaranteed jobs)

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- Walkabout
  Posted on November 29, 2012 at 3:21pm
  At 55% I would think that that would entitle the union / employees to pick 1/2 the directors.
  
  The directors have the ability to fire the CEO.
  
  Kregneva mentioned that ESOP-controlled SAIC and Booz-Allen Hamilton are doing well.
  
  I am sorry that it did not work at for you. Part of the problem is that the airline industry is tough. I won’t defend management of companies, corporations, or unions ( another large organization).
  
  Some of the banking corporations had clawbacks in the last 4 years. I think for a large corporation a clawback would be in order if you can demonstrate incompetence, etc.
  
  Report this comment
Trance
Posted on November 29, 2012 at 12:21am
encinom
Posted on November 28, 2012 at 11:31pm

… corp. success depends on the labor of the workers.
———

And the workers are entitled to the compensation that they agreed work for. See! Capitalism works out great for everyone involved! I am truly grateful to live in a country where people are allowed to succeed based upon how hard they are willing to work.

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Vespucciland
Posted on November 29, 2012 at 12:19am
Smart move there Joe Galt. Hand over the family business and get out of the game now. Let someone else deal with the ever-intruding smothering tide of regulation compliance courtesy of the central planners. Brilliant.

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- Cadcamtrainer
  Posted on November 29, 2012 at 5:59am
  “Giving back”….. What a trap…. He is getting out so he doesn’t have to deal with Obamacare. Let the employees/new owners deal with it. Can’t wait to see what happens to the business when all the stock boys own the store. I will like a update in bout 1 year.
  
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Robert999
Posted on November 29, 2012 at 12:18am
Of course, he has the right to do anything he wants with his business, but it looks like communism to me.

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- encinom
  Posted on November 29, 2012 at 12:51am
  The workers are a large part of any businesses success, shouldn;t they be rewarded for their loyalty? Or do you worship the patron saint of greed Ayn Rand?
  
  Report this comment
- Robert999
  Posted on November 29, 2012 at 1:14am
  @Encinomom, Communism is when the workers own the means of production. That’s what’s happening here. It doesn’t matter how it’s brought about.
  
  Report this comment
- Ragnars Repos
  Posted on November 29, 2012 at 1:57am
  “…patron saint of greed Ayn Rand?”
  
  If you studied her philosophy (which I doubt), you didn’t study it well.
  
  Ayn Rand never advocated for what you call ‘greed’. You’re a liar, or more likely a fool to say so.
  
  Report this comment
- encinom
  Posted on November 29, 2012 at 2:42am
  @Ragnars Repos
  I guess you never read Atlas Shrugged, or listened to her condamnation of charity.
  
  @Robert999
  As for the Communism, it does not mean the workers own the means of production, it means no one owns the means, it belongs to the society as a whole. Unlike Socialism where means of production was transfered from private to government ownership. Communism is final stage, where the government is disbanded and instead of ownership property is used for the common good.
  
  Report this comment
- TreeTrimmerJim
  Posted on November 29, 2012 at 2:44am
  Many of the employees at Apple that were there when Jobs was fired were still there when he came back. Was it just dumb luck that after Jobs came back the company seemed to grow?
  
  Report this comment
- NOTMOHAMMED
  Posted on November 29, 2012 at 3:57am
  Wyatt’s Supermarkets should be the new name.
  
  Report this comment
- encinom
  Posted on November 29, 2012 at 4:11am
  @TreeTrimmerJim
  
  Apple could have easily gone the way of Hostess, while the workers continued with the compnay there was a lack of vision from management. I never said workers are the sole reason for a business’ success, neither is management more often its management that is the cause of failure. Successful business labor and management work in harmony, look at Costco, stockholder hate the CEO, claims he over pays the workers and provides them with to many benefits. Yet the workers enjoy working there and have an investmnet in seeing the company prosper and it is.
  
  Report this comment
- Troll Patrol
  Posted on November 29, 2012 at 2:51pm
  @ Encinom
  
  Troll Patrol is advising readers to ignore you!
  
  Troll: one who posts a deliberately provocative, false or misleading comment with the intention of causing maximum disruption and argument.
  
  Tempus fugit.
  
  Report this comment
Ghandi was a Republican
Posted on November 29, 2012 at 12:14am
He was smart enough to form a trust that would assure continuity and terms for continuing the business. We are not talking about regular losers that didn’t work for what they got.
— ESOP (Employee Stock Ownership Program), in which each employee will own stock. The number of shares will be based on their salary and years of service
The man is not being irresponsible about this. I am sure that the beneficiaries can sell their shares among themselves or even outside but most people are smart enough to be responsible with this gift.

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Ghandi was a Republican
Posted on November 29, 2012 at 12:00am
The guy puts the alinsky radical version of community organizing to SHAME! ..

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Maxim Crux
Posted on November 28, 2012 at 11:37pm
Yep…and it will soon go out of business

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- asybot12
  Posted on November 29, 2012 at 12:02am
  Sadly enough maxim you might be right more than wrong . This man ( and family’s) convictions kept this business going ahead, try to keep that going with 400 ladles trying to stir the pot, no way. All of them will want to be “him” this will be a sad ending. My advice: give the stock to the people as he advices, put the whole thing up for sale and divide the $$ according to the stock values and hope the buyer keeps the thing going ( could be a part of the sales agreement.).
  
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- Maxim Crux
  Posted on November 29, 2012 at 1:38am
  You nailed it!
  
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The-Monk
Posted on November 28, 2012 at 11:33pm
What a wonderful man. : )

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The-Monk
Posted on November 28, 2012 at 11:30pm
Goodnight all. Going to bed early. Have a job interview in the morning. : )
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- Walkabout
  Posted on November 29, 2012 at 12:15am
  Good luck!
  
  Report this comment
- GBTVFan_Non_American_Overseas
  Posted on November 29, 2012 at 12:29am
  Good luck Monk!!!!
  
  Report this comment
mensa517
Posted on November 28, 2012 at 11:26pm
Merry Christms to his employees…I hope they don’t squander this opportinuty but will keep the stores going instea of selling out and follow by example by also giving back…

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- Walkabout
  Posted on November 29, 2012 at 12:14am
  How m,any ESOPs succeed?
  
  Report this comment
ehbardin
Posted on November 28, 2012 at 11:20pm
May God bless him.

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WINNEBAGOMAN
Posted on November 28, 2012 at 11:20pm
Woodman’s grocery chain in Wisconsin has been running this way for as long as I’ve known of its existence.

Still – this guy seems like a good person, with a good soul. I hope he gets to enjoy many more years enjoying life with his wife, children, and grandchildren. God bless you, sir.

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SaturdaysWarrior76
Posted on November 28, 2012 at 11:15pm
What a great story. God bless this man and his loyal employees! There’s a place in heaven for people like this. :)

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michael7695
Posted on November 28, 2012 at 11:13pm
Yeah…that’s the evil rich for you. Better raise their taxes.

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- encinom
  Posted on November 28, 2012 at 11:31pm
  He’s the exception, he realizes he didn’t guild his busniess’ success, but its success is also thanks to the hardwork of his employeess. Unlike the greed demonstrated by Papa John’s that sought to punish its employees despite the fact that corp. success depends on the labor of the workers.
  
  Report this comment
- Walkabout
  Posted on November 29, 2012 at 12:14am
  encinom
  
  ESOPs work in some cases. I can’t see them work in in all cases given the education system 7 propaganda of the left. Where I live there is a gas station chain that is an ESOP. I don’t hold it against them. I just look for price & quality.
  
  I have suggested to union people that instead of striking that they buy up the company stock. they say it is impossible. !st they don;t have to buy 100% but just 51%. Second with even 20% they could get directors appointed to the board who could have a say in the CEOs salary etc.
  
  You know what I get when I recommend that? Dirty Looks. It seems that some people want thing handed to them or have it both ways. If the AFL CIO really wanted to they could use funds to buy 12 company at a time & then use some of the profit of the bough companies to buy other companies until everything was employee owned.
  
  Compare the market capitalization of a company to the yearly dues of the AFL CIO. Start with a few companies & use the profits to speed up the process.
  
  Do I have to do all your thinking for you? You probably need someone to tie your shoes too!
  
  Report this comment
- encinom
  Posted on November 29, 2012 at 12:48am
  @Walkabout
  
  Actually, your stock plan wouldn’t work for large corp. Small ones it would be possible, (unless they are privately traded). Large ones, with hundreds of millions of of out standing shares would be impossible. Unions do own shares, usually their pension funds have enough to sit on many boards, the large unions are some of the institutional investors. But they do not have the power to buy out the banks and other large players. As you buy more an dmore shares, the cost per share would rise.
  
  Report this comment

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