Journey to an ESOP & Beyond

Randy Macho Man Savage was a childhood hero who my brothers and I constantly impersonated while watching WWF wrestling.  For a time, I didn’t realize it was choreographed fighting and not a real fight. This podcast episode uses this picture of WWF Wrestling to discuss what is called the “bring down” call for an ESOP transaction. This is a call conducted by the independent valuation firm representing the trustee around the final closing call.  It is intended to ask about any changes in the business since they did due diligence and after negotiations. The importance of this this episode is to understand how to navigate changes in your ESOP transaction right up to the point of closing.  

Nancy Pratt, CFO of Frederick Derr & Company, shares insights on their journey to a 100% ESOP transaction. Topics include succession planning, navigating the transition to an ESOP, financial planning, real estate in ESOP closings, post-transition accounting tasks, and the role of expert consultants.

Exploring the risks in ESOP deals, balancing debt burden, and deal structure for company stability, avoiding overvaluation pitfalls in ESOP transitions, and navigating financial challenges for ESOP sustainability.

Guest Bill Kropkof, an ESOP trustee with a Dept. of Labor background, discusses trustee roles, ERISA regulations, trustee independence, valuation firms, negotiation transparency, challenges with sell-side advisors, and the benefits of ESOPs like legacy building and employee retention.

Topics in this podcast include exploring unconventional paths in ESOP strategies, challenges of revenue models and valuation in ESOP transactions, strategic thinking for long-term success, and enhancing customer profitability and business growth

Dale Hobbs, founder of Hobbs Madison consulting firm, shares his journey to an ESOP. They discuss challenges, benefits, and the importance of choosing the right partner. Navigating employee updates and maintaining company culture post-transition are highlighted. They explore wealth transfer to employees and the positive cultural shift resulting from ESOP adoption.

On this episode I have been re-inspired by this great song to focus on why holistic planning your ESOP should minimize your worry of selling your stock during your journey to an ESOP.  As we go through the planning process, there simply are measures taken to balance all of the elements of your ESOP plan to provide a win-win-win…yes a triple win - one for the shareholder - one for the company and one for the employees…and even the key managers so that could be four wins.  Check out why this approach will help you to do what Bobby Mcferrin says “Don’t Worry - Be Happy!!!”

Mark O'Donnell, CEO of EOS Worldwide, discusses the synergy between EOS and ESOPs, emphasizing teamwork, accountability, and maximizing company valuation. The podcast explores succession planning, leadership fit, and empowering employees through ownership stakes. Learn how implementing EOS can enhance business performance and build intentional cultures to address talent shortages.

Exploring the importance of proactive communication with key employees during the ESOP process, emphasizing the significance of timely updates and involvement in decision-making. Discussing the impact of company culture on ESOP implementation and the challenges of succession planning. Highlighting the importance of clear communication post-deal closure to dispel misconceptions and maintain a culture of dialogue.

In this episode - I interview Steve Storkan and their approach at EOX, an organization founded out of the NCEO to develop state employee ownership educational resources to support companies considering ESOP as an option.  Their approach is in response to research that shows - states with education on ESOPs have a lot more ESOP companies.  Steve has an interesting ESOP background and leading the initiative to have more state centers throughout the U.S.