Business Valuations ∴ Employee Stock Ownership Plans (ESOPs)

Employee Stock Ownership Plan (ESOPs) Valuations

The legal demands of creating an ESOP require experienced advisors.  ESOPs can be a tool for business owners who would like to maximize benefits for shareholders and employees.  When undergoing the ESOP process, it is important to have a credible business valuation firm, since filings face intense review from the Internal Revenue Service and the Department of Labor.

ESOPs Provide Benefits

  • Selling to an ESOP can be tax-deferred.
  • The company selling shares also receives significant tax advantages in a leveraged ESOP transaction.  Both the principal and interest payments on loans used to finance a leveraged ESOP are tax deductible to the company.
  • ESOPs allow continuity in the management of the business.  Selling to an outside investor can involve restructuring, recapitalization, or the installation of a new management team.  After an ESOP transaction, management typically remains the same.
  • Sharing ownership with employees can increase morale and productivity, making the company more competitive and profitable.

SP&H’s Team of Experts Plays a Key Role

  • We establish the value for the ESOP initial transaction.
  • Working with the ESOP advisory team, we help determine whether an ESOP is right for your company.
  • Authoritative communication of value to your employees.
  • Superior diligence, documented support, and clear reporting.