Employee stock ownership plans

ESOPs help companies ensure continuity and compensate talent

Business owners looking for an exit strategy that is tax favorable may want to consider alternatives to private equity or finding a buyer for their business. For the owner concerned about their employees’ well-being and their company’s longevity, employee stock ownership plans (ESOPs) can ensure the company’s ongoing success after they depart while rewarding loyal employees.

ESOPs are often misunderstood. Business owners may know the basics—an ESOP is an equity-based retirement plan that allows employees to become owners of the company—but they may view it as simply an employee incentive. ESOPs offer so much more, including the potential for significant personal benefits to the company’s founders.

RSM has advised hundreds of clients on the upside of ESOPs. Our team has extensive experience in the structuring and compliance issues related to employee ownership. As the middle market leader, RSM has the scale to assist you from an ESOP transaction through to ongoing maintenance of your plan.

Watch ESOP insights from Anne Bushman, RSM Compensation & Benefits Leader

Industry sectors that can benefit from ESOPs include:

Construction

The construction industry is unique in that company ownership is often passed from one generation to the next. We’ll recommend how to use an ESOP to help you preserve a business and a family legacy.

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Consumer goods

The market for talent in the consumer goods industry is extremely competitive. ESOPs are another perk of an effective compensation and benefits package to attract and retain talent while including significant upsides for the company’s owners.

Food and beverage

Environmental, Social and Governance (ESG) initiatives in the food and beverage industry are a key market differentiator—and nothing is more social than sharing ownership with employees. We’ll advise you on the benefits of ESOPs tailored to this sector.

Manufacturing

Studies show ESOP companies outperform non-ESOP ones through recessions and experience lower turnover. This makes them a viable option for manufacturing industry leaders responsible for maximizing their human capital and maintaining a stable workforce.

Professional services

Professional services firms depend on strong workforces developed and structured around their unique culture. ESOPs are another way for business owners to reward employees while building company loyalty.

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