We Understand the Technical Nuances of ESOP Valuation

What is it

Some of the unique characteristics of ESOP companies can have important impacts on the value of ESOP stock.

EXAMPLES OF ESOP-SPECIFIC VALUATION FACTORS INCLUDE:

  • ESOP retirement benefits expense
  • Repurchase obligation
  • Owner/former owner compensation
  • Control
  • ESOP-generated tax savings
 

Why it matters

In addition to regulatory and legal consequences, overlooking or misunderstanding these factors can lead to serious economic consequences for participants and the company.

Appropriate valuation of ESOP stock is important for reasons that go beyond mere compliance.  The valuation must match the economic reality of the company in order for ESOP ownership to remain in sustainable equilibrium.  When this equilibrium breaks, unintended consequences ensue.

 

How we do this well

Our ESOP valuation team is deeply engaged in the ESOP community.  We believe that direct engagement in the ESOP community is by far the most effective way to stay ahead of changes in the continuously evolving regulatory and legal landscape.  We have developed a deep base of experience by working with ESOP professionals across the country on a variety of different types of ESOP transactions.