Want employees to have true stock in your veterinary practice?
In this practice with an employee stock ownership plan, it's share and share alike.
(Getty Images)Inspired by a junior partner in her large veterinary practice looking for an exit strategy and a need to buy out his stock, Annette Engler, LVT, CVPM, CCRP, researched how to set up her own employee stock ownership plan (ESOP) for everyone in the veterinary practice.
“This plan provides a retirement/pension plan for the employees based on salary level and hours worked,” says Annette. “It is a way to offer a return on investment to those employees who are dedicated to the growth of the practice. We are a 40-year-old practice that has experienced growth, but also increased expenses. This was a way to financially reward employees based on practice growth. It is a win-win situation for all.”
Where did Annette start? She read several books and did a lot of research through accountants and attorneys. Where do you start? Let's dig in with a quick Q&A.
First, what is an ESOP?
Annette: An ESOP is a pension plan for the employees. It engages employees and gives them a portion of the profits as the practice grows. It rewards dedication and longevity as well as encourages an ownership mentality for workers.
What is the eligibility for team members?
Annette: Employees are eligible after a year of service and must work 20 hours/week or more and be over 21 years of age. At that time, they are automatically eligible and receive the benefit. Since there is no obligation on the employee part, there is not an "opt-out" option. I think the eligibility requirements are at the discretion of the employer, but they have to be uniform for all employees-no discrimination allowed.
What first steps should practices take if they want to offer this benefit for employees?
Annette: Educate yourself about whether or not this is right for your practice and employees. Read all about ESOPs-they are lots of online resources and books available. Attend local and regional ESOP meetings. Find an ESOP specialist and attorney in your area and have them look at your business model and give advice.
dvm360, Firstline and Vetted will be publishing personal stories, in-the-trenches advice and bright practice management ideas in the coming months-all from entrants in the dvm360/VHMA Practice Manager of the Year contest. The nine finalists were announced at CVC Kansas City in August, and the Practice Manager of the Year will be announced at CVC San Diego in December.