It’s the elephant in the C-suite.
Nobody wants to talk about it, and everybody knows they should. I’m talking about succession planning.
It’s like writing a last will and testament for a business owner. Rarely do people want to think about their career’s end. Our work becomes an identity, probably too much so.
The succession plan forces that hand. But the business and the employees an owner spends a career investing in are far better for it.
Local corporate consultants recommend addressing a company’s succession plan five years before it seems necessary.
Peter and Jack Herschend of Silver Dollar City and Herschend Family Entertainment Corp. seem to have taken that cue. Their ownership transition started in the late 1990s, but don’t think the reins are going anywhere too far. Family is in the company name for a reason.
I recently spent an hour interviewing HFE Corp. co-founder Peter Herschend for Springfield Business Journal’s Lifetime Achievement in Business Award. We sat on park benches on a sunny, humid day at the Branson theme park, just after the brothers were recognized for 65 years of service during a morning pinning ceremony. He spoke candidly and thoughtfully about his management style, business blunders and the career dreams he’s not living out – “Thank God for small favors,” he says. (
Click here to read the full interview.)
In all the Herschends’ achievements in business, their legacy might hinge on the succession plan. The brothers turned over management to nonfamily members long ago, but ownership of the corporation’s 80,000 shares has been gradual.
As might be expected, Peter was tightlipped about the revenues and value of the private company that now owns and operates 22 entities, from Dollywood to The Harlem Globetrotters. Barron’s calls it the country’s largest privately held theme park operator, with some 13 million guests a year. Forbes ranked the 34-member Herschend family No. 170 on America’s Richest Families list with a 2014 estimated net worth of $1.1 billion. The publication pins HFE Corp.’s sales that year at $400 million. The Herschend clan dropped off the list last year, barely missing the $1.2 billion cutoff, Forbes reports.
Today, he tells me, the brothers own less than 500 shares combined.
“We did that through long-term transfer gifting of our stock,” Peter says.
Jack, who’s 83 years old, has three children, and Peter, 81, has five. As it’s structured, their children and their grandchildren have ownership through generation-skipping trusts, and it will remain in the family for perpetuity.
“Nobody outside of the family – blood line, marriage or adopted – can own the stock,” Peter says. “It cannot be sold outside the family.”
Well, no individual stock sales.
The caveat is if enough stockholders agreed to sell out and their shares represented a qualified percentage of the stock. A scenario like that, where family members down the line no longer were interested in the entertainment business, could result in a corporate buyout or the company becoming publicly traded.
“Jack and I also believe we do not rule from the grave,” Peter says.
Springfield Business Journal Editor Eric Olson can be reached at eolson@sbj.net.
