Journey to an ESOP & Beyond

This episode tackles the work needed for all companies but especially companies on a journey to an ESOP to get the right people in the right seats inspired by me recent Southwest flight.  It focus on three primary activities - recruitment strategy, onboarding and letting people go...

In this episode Todd Knowlton, CEO of Smooth Fusion explains his reasons to turn his company into an ESOP.  In this case, Todd and I went through the ESOP process as a non-leveraged contribution for this first step on his journey to an ESOP - find out what his factors were and why their company went this route.

This episode we explore the cost of an ESOP - going through the comparison of an M&A transaction with an ESOP - similarities, differences and result of how that is interpreted in the ESOP marketplace.

On this episode - I discuss with Mike Zeller, a very experienced ESOP attorney one of his case studies in working through a leveraged ESOP transaction.  There are some interesting points to consider from this ESOP case study!

This episode covers the basics of C-Corp tax as it relates to ESOPs and provides an alternative to the 1042 to deal with Capital gains tax using code section 1202.

This episode Greg and I discuss the pre-funded ESOP strategy as a way to take the tax deduction each year while planning for your ESOP leveraged transaction.  We discuss the pros and cons of this strategy that might give you some ideas about your own journey to an esop.

This episode reviews the details of what is known as an A Reorg...for companies that are going Esop and are currently S-corps.  This opens up the topic of whether or not you can revoke the S-Corporation and then as a C-Corp take the 1042 capital gains tax deferral then immediately go back to an S-corporation which by IRS code should be a five year waiting period.  Some advisors use this as a tactic to sell the client on their services which are probably going to be pretty costly...listen on to see what kind of questions you should ask on your journey to an esop...

This episode features a newly formed ESOP from 2020 - a company called AOTC with its owner Brian Barnett and Todd McDowell.  They chose to establish a partial ESOP as a business strategy not an immediate exit but to enhance a strong employee company culture.

This episode I discuss some common myths and misconceptions from experience with ESOP skeptics...thinking about the process of working the shareholders and advisors skepticism is an important and essential step on this journey to an ESOP.

This episode evaluates the points of Thomas' recent article published at the Harvard Business School regarding ESOPs as a solution to the gap in wealth inequality.  Thomas and I discuss this socio-economic reality in our country and the possibilities that ESOPs create in helping to solve this national crisis.