35 Years of Consulting Experience has Taught Us
the Answer to Every ESOP Question is …
“It Depends.“

An ESOP owned company doesn’t come with an owner’s manual. While there are laws, regulations and guidance, often times questions arise regarding the operations, governance, communications, and integration into the corporate strategic plan that are not black and white.  Responding to many ESOP questions depends on individual and corporate objectives, the age and ownership level of the ESOP, corporate cash flow and earnings, corporate status (C or S, public or private), etc.

While the flexibility of the ESOP can be a substantial advantage in structuring ESOP transactions and in ongoing ESOP operations, flexibility is a double-edge sword.  The flexible nature of an ESOP can present opportunities and challenges to the ESOP company’s board, management, and trustee to continually review ESOP operations in light of changes in shareholder’s objectives, corporate operations, and legal and regulatory changes.  The ability of a 100% ESOP-owned S corporation to operate as a federal tax exempt entity requires serious examination.

ESOP Services, Inc. is uniquely qualified to assist ESOP companies in determining how to best achieve their objectives.

Key issues include:

  1. Corporate governance best practices,
  2. Trustee and valuation independence best practices,
  3. Additional equity incentives for key management and/or board members,
  4. Acquisition or Divestitures utilizing an ESOP,
  5. Election of S corporation status,
  6. The impact of S corporation distributions on ESOP allocation and debt repayment,
  7. Establishing a flexible ESOP distribution and stock repurchase policy that addresses:
    1. dilution,
    2. company cash flow,
    3. adequate security requirements,
    4. Diversification elections
  8. Distribution policy
  9. 401(k)/ESOP combinations
  10. Designing plans and policies that exceed normal contribution limits
  11. Charitable giving
  12. Termination of an ESOP
  13. Selling an ESOP company

The list goes on and on, but if you are involved with operating an ESOP, you already know that.

Can we be of assistance to you? A call, fax, or e-mail allows us to determine the extent to which our services match your needs. If we can’t help, we will recommend someone who can.