An Introduction to ESOPs

Employee Ownership Fundamentals

Employee stock ownership plans enable closely-held companies to sell equity, at a fair market value, to an employee trust. This is not a stock option program. Instead, an ESOP is an ERISA-authorized, defined contribution plan.

Thousands of privately-held companies nationwide have turned to leveraged ESOPs as M&A alternatives. For many middle-market businesses, employee ownership offers a unique mix of benefits including independence, flexibility, and legacy preservation.

Unlock Net Worth

Creates a tax-advantaged, liquidity event and diversification opportunity for selling shareholders.

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Free Cash Flow

Yields lucrative tax-breaks for the business; 100% employee-owned companies can operate income tax-free.

Reward Employees

Full-time staff gain stock over time, which can provide stability and a chance to share in corporate growth.

Sustain Legacies

Selling shareholders can maintain a meaningful role with their company and potential upside.

An ESOP Case Study

Join Larry Kaplan, CSG’s Founder and Managing Partner, for a review of the leveraged ESOP feasibility, structuring, and financing process in this brief video.

Based on real client interaction, this case study highlights the key considerations and strategies behind a successful employee stock ownership plan transaction.