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How Are Control Premiums And Minority Discounts Handled By ESOP Appraisers?

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In this video, we discuss how ESOP appraisers handle control premiums and minority discounts.

Transcript

In our experience, ESOP appraisers will not use a controlling interest or control premium or a valuation without a minority interest discount in a transaction where the ESOP is buying both mathematical control and what we call control in fact. Control in fact is a facts and circumstances and legal analysis of whether or not enough incidents and benefits of control of the company are being transferred to the ESOP.  On the other hand, if an ESOP is buying a less than 50% interest in the company, the ESOP appraiser will always use a discounted valuation. 

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