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GAIN PERSPECTIVEEmployee Stock Ownership Plans

Demystifying the ESOP: Comprehensive guidance for exploration, implementation, and administration 


The establishment of an Employee Stock Ownership Plan (ESOP) is less a sprint than a marathon, and our team of ESOP advisors works closely with clients to provide insight and guidance from start to finish. Our process begins with a comprehensive feasibility study, allowing us gain a clear understanding of the levers that inform the ESOP’s initial valuation. Once feasibility is established, we work with key client stakeholders to define a plan for establishing and maintaining the ESOP in a form that meets the needs of the client company while providing reasonable benefits to plan participants. Our proven process also includes: 

  • Initial valuation
  • Plan design
  • Plan implementation
  • Plan administration

With the plan in place, the BerryDunn team provides ongoing ESOP maintenance and support, including regular updates on policy and regulatory changes that impact the plan. Our ongoing support can also help you understand: 

  • Modeling after-tax proceeds for selling shareholders
  • Pros and cons of recycling shares versus repurchasing shares when a participant terminates employment
  • Distribution policy establishment or revisions to existing policies
  • Tax planning when the ESOP does not own 100% of the outstanding stock
  • Employee diversification requirements
  • Planning for the second or third stage ESOP transaction 
  • Evaluation of nonqualified deferred compensation opportunities 
  • Nonqualified deferred compensation programs for senior management
  • Annual ESOP valuations

To learn more, please contact our ESOP services team

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