UNDERSTANDING ESOPs A primer on employee stock ownership plans

Although more than 6,000 U.S. companies have an employee stock ownership plan (ESOP), many businesspeople are not well acquainted with them. ESOPs are often confused with stock option plans, which are something else altogether. They are not stock purchase plans; employees almost never buy stock through an ESOP. They do not require that employees run the company or even elect the board unless companies want to structure themselves that way. Most people, in fact, would be well served by forgetting what they have heard or thought about ESOPs before starting to learn more about them. This book will teach you what ESOPs really are, how they work in both C and S corporations, what their uses are, what the valuation and financing issues are, what the steps to set them up are, and much more.

Table of Contents

1. A Visual Introduction to ESOPs
2. An Overview of How ESOPs Work
3. Selling to an ESOP in a Closely Held Company
4. ESOPs in S Corporations
5. Understanding ESOP Valuation
6. Things to Do with an ESOP Besides Buying Out the Owner
7. Financing an ESOP
8. ESOP Distribution and Diversification Rules
9. Choosing Consultants and Trustees
10. Corporate Performance and Ownership Culture
11. ESOP Governance
12. Simpler ESOP Structures
13. Alternatives to Using an ESOP for Employee Ownership