Employee Stock Ownership Plans

Our Expertise

ESOPs are complicated — but they don’t have to be. We can help.

An employee stock ownership plan (ESOP) is a popular method of compensating and motivating employees, providing creative tools for succession and estate planning, and raising working capital. However, between regulatory issues, cascading tax changes, and the inherent complexity of this ownership structure, ESOPs face stricter guidance and more scrutiny from regulatory bodies such as the Internal Revenue Service (IRS) and Department of Labor (DOL) than ever before. 

Given the opportunities and challenges that come with ESOPs, it’s critical to work with experts versed in audit, taxation, consulting, and valuation services specific to this ownership structure. Access to the right resources can mean the difference between awareness and advantage.

    In addition to performing ESOP audits (leveraged and nonleveraged), we provide a full menu of services to simplify the technical details of these plans, including:
    Acquisition strategies for ESOPs.
    Company Leadership
    Company leadership and succession planning.
    Consultation around plan design, reallocation, deductibility, repurchase liability, prohibited transactions, general nondiscrimination, synthetic equity, SARs/deferred compensation, controlled group issues, dilution issues, DOL and IRS audits/inquiries, plan amendments, and plan interpretation.
    Debt Financing
    Debt financing through PM Corporate Finance.
    Tax compliance and strategy, including entity structuring, drop-down LLCs in S corporation ESOPs, impact of long-term gains tax under 453A, 1042 treatment, and debt restructuring impact.
    Valuation opinions, including feasibility studies, fairness opinions, annual valuation updates, warrant valuations, and valuation peer reviews.


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    Client Experience

    It pays to work with experts.

    With nearly 50 years of ESOP experience, not only has our team performed countless ESOP audits, but we’ve helped many organizations transition to employee ownership through an ESOP, conducted a variety of ESOP valuation engagements, and ensured that plans meet the stringent requirements under the Employee Retirement Income Security Act (ERISA) and regulations issued by the IRS and DOL.

    In the words of Michael Krucker, leader of our employee benefits consulting group, “Few exit strategies offer the kinds of benefits that an ESOP does, but it takes a certain type of business to succeed in this structure. Our team of ESOP experts help our clients determine if an ESOP is right for their organization –– and if it is, we help them through every step of the process.”