We understand the unique opportunities an ESOP provides to owners and employees, and have the wide-ranging knowledge, experience and resources to manage these opportunities, protect your assets and provide innovative ideas.
We understand the unique opportunities an ESOP provides to owners and employees, and have the wide-ranging knowledge, experience and resources to manage these opportunities, protect your assets and provide innovative ideas.
An ESOP is a unique corporate finance tool that allows business owners to gain liquidity, often on a tax-advantaged basis, while passing along ownership to employees. Shares of company stock are allocated to employees’ accounts annually and are held in an ESOP trust until the employee vests in the plan and retires or leaves the company. An ESOP is a qualified retirement plan regulated by the Internal Revenue Service and the Department of Labor to ensure that the ESOP is used for the benefit of employees.
An ESOP can be an appealing option for an organization looking to provide its employees with a tax-deferred retirement benefit while also attracting new employees and retaining top talent through equity ownership. There may also be significant tax benefits if owners consider an ESOP exit strategy. Other alternatives—such as selling to a strategic buyer or private equity firm, or even conducting an initial public offering—typically force the owner to sell their entire stake in the business. A benefit of selling stock to an ESOP is that the seller controls the process.
By establishing an ESOP, you create a tax-deductible, inhouse market to give you liquidity for owned shares at any time you choose. Under certain conditions, you can even sell tax-free. Establishing and maintaining an ESOP involves numerous complexities. At blum, we’re aware of these challenges and have experienced professionals focused on meeting your ESOP needs.
Our Accounting and Auditing Department prepares a significant amount of compiled, reviewed and audited financial statements for employee-owned companies. We understand the unique opportunities an ESOP provides to owners and employees, and have the wide-ranging knowledge, experience and resources to manage these opportunities, protect your assets and provide innovative ideas.
blum has long-standing relationships with outside advisors to the ESOP community. Our team works with your company, the valuation firm and third-party administrators within a timeline that meets your needs for filing and issuing participant statements. We will help you streamline annual and future benefits as well as develop ideas to fund current and future repurchase obligations.
Any privately held company that has an owner who is thinking about transitioning ownership. ESOPs are best suited to companies that have high employee participation and dedication to the success of the company.
Usually, companies with at least $10 million in annual revenues and at least 25 employees are the best candidates for ESOPs. There is no upper limit on the size of company that might adopt an ESOP.
• Automotive
• Manufacturing
• Financial Services
• Food and Beverage
• Construction
• Professional Services
• Wholesale Trade/Distribution