And how does an employee stock ownership plan work?
ESOPs enable privately-held companies to sell shares, at a fair market value, to an employee trust. This is not a stock option program. Instead, an ESOP is an ERISA-authorized benefits plan.
A trust representing at least 10 employees.
The price is negotiated with an institutional trustee, based on an independent valuation.
Commercial and/or seller financing, paid-off with pre-tax corporate cashflow.
Full-time employees are allocated shares proportional to their annual compensation.
A portion of all shares is allocated annually; the shares vest within 3-6 years.
Vested stock is sold back to the company, at a current valuation, when employees depart or retire.
Since 2000, CSG Partners' nationally-recognized, investment banking team has helped private companies capitalize on the benefits of ESOPs.
Join our founder, Larry Kaplan, for a compressive introduction to ESOPs. You'll learn more about key ESOP benefits, tax efficiencies, structures, valuations, financing, and typical "good fits."
For additional news and insights from our advisors visit our ESOP Resources page.