Find Answers to Your Most Important ESOP Questions
What are employee stock ownership plans (ESOPs) and why do business owners choose them? How do ESOPs compare to other succession planning options, in what types of companies are they most advantageous, and how are they set up?
On this page, you will find concise answers to those questions, arranged in an order that helps to build a progressive understanding.
Start by watching the short videos to learn about each topic’s key points and then review the accompanying materials to explore the details.
ESOPs: Best Known Benefits
ESOPs are tax-deferred succession plans for business owners, tax-deferred retirement plans for employees and good for companies.
- READ: Brief Overview of an ESOP’s Tax Benefits
- READ: Seller Benefits of an ESOP
- WATCH:
ESOP Vs. Third-Party Sale
The decision to choose between an ESOP or a third-party sale should be specific to the seller’s goals and company’s benefit, and always well-informed.
- READ: Both Sides of the Coin
- LISTEN: Aren’t ESOPs Expensive?
Is My Company Ready for an ESOP?
Not all companies are “ESOP ready,” and some companies in certain industries may never be. A lot depends on revenue and size.
- READ: How Much Revenue?
- WATCH:
How an ESOP Is Created
Every company is different and the most successful ESOPs are individually designed and assembled to serve specific purposes.
- READ: How an ESOP Is Assembled
- WATCH:
What’s Next?
By now you might be wondering, “Is an ESOP suitable for my company?”
Size and cash flow are just part of the answer. “Suitability” must consider the needs of the sellers (e.g., liquidity, legacy and tax planning), corporation (e.g., governance, strategic planning and succession), executive management (e.g., benefits and leadership) and family (e.g., inheritance and wealth).
We have a specific process for identifying issues, advantages, trade-offs, concerns and alternatives to arrive at a balanced solution for all affected. There are many ways to use – or not use – an ESOP to meet the needs of all involved. Let’s start a conversation about ESOP suitability for your company.