Take the Right Steps When Redesigning Mature ESOPs to Allow “Reverse Allocations”
Employee stock ownership plans (ESOPs) reward longevity and provide a meaningful stake in a company’s success. Often, due to large initial sales of shares to the plan, shares can over-accumulate to those with tenure to the dismay of newer employees who may not have the opportunity to accumulate meaningful number of shares in their ESOP accounts.
Companies may consider using “reverse allocations” to alter the ESOP ownership structure and to provide a greater ESOP opportunity to newer employees.
Interested in learning more about reverse allocations? Please fill out the form on this page to download our whitepaper.