ESOP FAQs

Questions about corporate governance in ESOP companies are common among business owners who are exploring this employee benefit plan. The biggest questions revolve around the ESOP’s impact on corporate governance and whether or not forming an ESOP will affect board function and responsibilities in this area.  In general, forming an Employee Stock Ownership Plan or…

As a qualified retirement plan, employee stock ownership plans (ESOPs) are required by law to have an ESOP trustee. Selecting an ESOP trustee is a critically important part of establishing and maintaining an ESOP and should be undertaken with care.    What is an ESOP Trustee? An ESOP trustee is an objective third-party who has…

Although Employee Stock Ownership Plans (ESOPs) are often formed to ensure the successful continuation of a business, there are times when an ESOP company is later sold to a third-party. When this occurs, ESOP participants can get nervous, wondering what will happen to their ESOP accounts when a company is sold. What to Know About…

Employee Stock Ownership Plans (ESOP) are best known for providing employees with the opportunity to become part-owners of the company they work for, improving productivity and commitment to the company. Less well-known is the fact that ESOPs are often used as an exit strategy for the owner of the company. There are numerous benefits of…

Implementing an Employee Stock Ownership Plan (ESOP) is not a quick or easy decision. It requires forethought and planning. ESOP formation forces a company to think about not only the practicalities and financials of ESOP implementation, but also the impact on the company’s culture and the business owner’s legacy vision. What is an ESOP and…

Employee Stock Ownership Plans (ESOPs) are qualified retirement plans that reward employees with shares of stock of their employing company. This type of plan not only helps employees save for retirement, but also makes them shareholders and part-owners in the company. As an ESOP consultant, Aegis Fiduciary Services has witnessed these plans become increasingly popular…

There are times when an ESOP company may need to consider selling the business. Perhaps it is an attractive offer from a competitor or a private equity firm. Perhaps the ESOP business leaders see an opportunity to sell that they were previously unaware of and feel it needs to be considered.  The question arises, can…

Employee stock ownership plans (ESOP) are qualified retirement plans that grant company shares of stock to employee participants. One common question that owners and ESOP sponsors have to address early in the formation of the ESOP is how those shares will be allocated to participants.  Who Can Participate In ESOP Shares Allocation? Anyone who participates…

ESOP valuations are a critical component of every employee stock ownership plan (ESOP). Accurate valuations are most obviously necessary in order to ascertain the value of employee shares, but they are also needed well before an ESOP is established. For instance, companies need to conduct an ESOP valuation in order to determine the feasibility of…

Employee stock ownership plans (ESOPs) and employee stock purchase plans (ESPPs) are both attractive employee benefits that help participants save for retirement and build wealth. They each encourage employee investment in the business in both a literal and figurative sense, which can aid in retention efforts while boosting employee satisfaction and productivity. Many business owners…