Employee Stock Ownership Plans (ESOPs) have proven themselves to be a successful company ownership structure for a wide variety of businesses.
Editor's Note: This content originally appeared on BDO USA Healthcare's blog.
In an ESOP, owners sell to a benefit plan (the ESOP), and employees receive ownership in their employer company through a benefit account that vests over time. At retirement, this ownership interest is redeemed and the employee receives the proceeds from this redemption.
In environments ripe with restructuring and M&A, ESOPs may provide a viable option for addressing liquidity issues and raising capital, while also giving employees extra "skin in the game" that could translate to improved accountability, productivity and efficiency in operations. ESOPs may also be an important component of tax-efficient exit plans for business owners. To continue reading, click here >>