ESOP Transactions

An Employee Stock Ownership Plan (“ESOP”) is most commonly seen as a vehicle for the transfer of ownership and a motivational tool for private companies.

ESOPs are a type of qualified retirement plan that are designed to be invested primarily in employer securities. Consequently, ESOPs give employees an ownership stake in the companies where they work. ESOPs are distinct because they are a flexible tax-advantaged financing tool for a corporation as well as an ERISA (the Employee Retirement Income Security Act) protected employee benefit plan.

Selling all or a portion of the business to employees through an ESOP can prove a viable alternative to an outright sale, third-party investor, or management buyout to achieve the desired liquidity. We can offer guidance to help you determine whether selling to an ESOP is the right choice for you and your business. Most importantly, we can help you assemble the right ESOP team to design and implement your ESOP strategy.

By assembling an experienced ESOP team that always has the client’s best interests in mind, we are able to maximize value to the selling shareholders, the businesses, and their employees. We can help you understand:

  • Pros and cons of the various transaction structures
  • Financing and valuation issues
  • C corporation and S corporation distinctions and nuances
  • Executive compensation
  • Other long term incentive plans that often accompany the implementation of an ESOP

Many times after we have assisted a client with the implementation of an ESOP, we often counsel those clients as to how to effectively use the ESOP to acquire other businesses and implement best practices within the ESOP owned company. Our ESOP specialists understand that the operation of your ESOP impacts both the company’s financials and the company’s tax position. We will work with you on such issues to make sure that the operation of your ESOP is integrated into other aspects of your company reporting.