Posts tagged ‘employee benefit program’

A New Year’s Resolution

I am not looking forward to the first few weeks of January. The weather in Iowa is less than ideal (no bathing suits needed), but after 40+ years I have gotten used to it. What I haven’t gotten used to are the long lines at the health club. Exuberant, well-intentioned masses flood the facilities determined to lose weight and get fit–confident that they will defy the odds and actually keep their New Year’s resolution.

The majority of people will lose steam after a week or two and the lines will gradually disappear. In fact, losing weight and getting fit is the most commonly broken New Year’s resolution. Don’t break that resolution? How about one of these others?

The top ten most broken resolutions are…

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Alphabet Soup – The ABCs of ESOPs

If you have been reading my blog for the past few weeks you may have noted that I have spent quite a bit of time talking about the benefits of an ESOP.  This post is going to look at how an ESOP is formed.

ESOPs are unique.  Each is designed around the needs of the seller, the company, and the employees.  There are some commonalities however.  Let’s look at a simple leveraged ESOP transaction (a leveraged transaction is one where external financing is obtained).

They say a picture is worth a thousand words.  The following graphic can help explain the workings of the ESOP transaction. Read more

Timing is Everything

Our annual ESOP client meeting was held last Wednesday, November 7th  prior to the start of The ESOP Association Conference and Trade Show.  More importantly, it was held a mere 16 hours after the election polls closed on the west coast.  As you might expect, the election, and its aftermaths, took center stage.

It was evident from the participant’s comments that elections have consequences.  Whether you are red or blue, have an R or a D as your party affiliation, the results matter.  And what the election results mean is certainly less than clear.  What is clear, healthcare, regulation, and tax policy are major concerns to companies with Employee Stock Ownership Plans (ESOPs).

As with most other businesses, the attendees are struggling to quantify the impacts of the Affordable Care Act.  Last summer’s U.S. Supreme Court Ruling clarified many questions but others remain elusive prior to the rapidly approaching January 1, 2014 implementation date for many major provisions. Read more

Hey you! What are you doing in that box? It’s time to starting thinking outside of it…

When most people hear Employee Stock Ownership Plan (ESOP) they think exit planning (or maybe nothing at all). That’s not surprising given that historically ESOPs have been positioned as a succession planning approach.

Here’s an example, a key partner at a manufacturing company wants to retire, but the remaining partners can’t afford, or don’t want to buy him or her out. An ESOP could be used by the remaining partners to fund the buyout of the partner that’s leaving in order to avoid divesting the company.

However, to think of ESOPs as only a tool for exit planning sells them short. Let’s broaden our perspective for a second. Read more

Don’t be fashionably late to the ESOP party. You’ll miss out on the cake!

I have known for a couple of months that my “Employee Stock Ownership Program” (ESOP) blog would be launching soon.

Yet, here I sit in front of my keyboard the day before it is due preparing. Procrastination at its best (or worst).

This somehow seems entirely appropriate given that many business owners treat business succession in the same way.  When it comes time to transition ownership they start exploring options.  Unfortunately, they often find that some options are no longer available to them given their desired timing to exit. Read more