An Employee Stock Ownership Plan (ESOP) is a powerful tool that allows a business owner to sell all or part of his or her company to employees.

Some of the many benefits of establishing an ESOP are:

• Selling to an ESOP can be tax-deferred.
• The company in which shares are being sold 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, which can significantly reduce its tax liability.
• ESOPs allow continuity in the management of the business. Selling to an outside investor can involve restructuring, absorption into an existing company, 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.

ESOPs are very technical, however, with many rules and regulations. As ESOPs face intense scrutiny from both the Internal Revenue Service and the Department of Labor, it is important to hire a valuation firm and other ESOP professionals that understand how to take advantage of this incredible tool while maximizing the benefits to both shareholders and employees.

SP&H assists clients with:

• Determining whether an ESOP is right for the company
• Establishing an ESOP
• Maximizing the benefits of an existing ESOP
• Communicating value to employees

ESOP Resources

The ESOP Association
The National Center for Employee Ownership

Selected Testimonials

"Sanli Pastore & Hill, Inc., has prepared our company's ESOP business valuation since 1997. I have personally worked with Nevin Sanli and Forrest Vickery who have always provided us with professional and timely service. But more than just providing service, they care about our business and the service they provide, creating a valued relationship."
-Mr. Paugh, Business Owner