Journey to an ESOP & Beyond

In this episode, we jump right into the expanded version of Season 5 by dealing some factors related to communicating the ESOP to your employees.  Jumanji is an ideal movie to explain that there is something that changes after an ESOP that can change the outlook on how employees see themselves - who they are and who they want to be - we want them to move from employees to employee owners on this journey to an ESOP & beyond!

Employees from ESOP company Smooth Fusion in Texas discuss their roles in the newly formed ESOP committee. They talk about ESOP communication strategies, roles within the company, and initiatives aligned with company culture. The podcast delves into employee engagement, wealth building beyond ESOPs, and the importance of continuous education on ESOPs and financial literacy.

This episode officially kicks off the Season 5 and the expansion of the podcast as a direct resource for Employee Stock Ownership Plans.  The Journey to an ESOP just became better because we are incorporating “& Beyond” to discuss not only pre-esop topics but go beyond that and deal with post-esop topics and issues that come up.  This episode provides a high-level understanding of what is to come and what we have dealt with in the last four seasons.  The value of listening will be to grasp some overall ESOP concepts that may be helpful for you to think about whether you are exploring your own journey to an ESOP or thinking about existing ESOP issues that are beyond the ESOP closing.

This episode takes advantage of the opportunity that we have during Christmas to stop and celebrate the reasons why folks decide to go towards ESOP… In this episode, we cover the ghost of Christmas past and thinking about the people that have helped your business get to where you are and how an ESOP can be the perfect way to reward them.  The Ghost of Christmas Present reminds us of what is happening right now that includes the current tax benefits of an ESOP and other benefits to reduce the workload and spend more time with the family.  The Ghost of Christmas yet to come makes us think of the future legacy of the business and how much better it will en to be an ESOP company.  MERRY CHRISTMAS - The ESOP Guy!

In this episode we finish the series we started to help prepare folks for the ESOP site visit.  The focus of the episode is to understand in covering first the financial highlights and how they connect to points you will want to make with the trustee and their valuation  firm.  In addition to the financials - the remaining part of the presentation will be to cover the ESOP deal structure and anything specific to the transaction.

This episode we get to review what is important about third party administration of an ESOP plan.  Scott Freund is an absolute expert at the nuances of how benefit testing as it incorporates IRS limitations related to ESOP Plan design.  For instance, IRS code section 404 that generally allows for a contribution to the ESOP plan up to 25 percent of the payroll and IRS code section 409(p) related to S-corporation ESOPs to test related to disqualified persons.  This is an essential step to understand for planning your ESOP and for staying on top of an existing ESOP plan.

In this episode, we discuss the other parts of the presentation as it relates to the company overview getting into other aspects of the presentation for the trustee and the valuation firm.  The value of having a solid presentation, regarding how the company operates, the leadership team, the business processes that are repeatable, and provide a functional mitigation towards the business.  This is the one opportunity that we have to put a factual, solid understanding of the way the company operates, including how the strength of the company provide a sustainable long-term ESOP.

This episode we are following up on the August IRS notification entitled “IRS cautions plan sponsors to be alert to compliance issues associated with ESOPs” Allison Wilkerson is a frequent speaker at ESOP conferences and works at McDermott Will and Emery out of Texas.  She has a very strong background in working through complex IRS and DOL issues related specifically to ESOPs.  She offers some insight into what this notification means as it relates to ESOPs.  The highlights of this episode are going to help folks not be overly concerned with this notification by the IRS, however, Allison does point out areas that you should be aware of in putting together your ESOP and possible IRS exposure issues.

In this episode we explore another very important section of the ESOP site visit presentation - “The Customer Overview.”  Along the Journey to an ESOP, sell-side advisor with the the company’s team are presenting the company to the trustee and valuation firm.

This episode is helpful to better understand how the banker is thinking about the ESOP deal.  Chris Cucci is Chief of Staff at a unique bank - they are a B-Corp that understand the social impact that ESOPs play in many areas - the good that can come from selling your business to an ESOP.  Chris is a veteran banker and has used his skillset to direct their efforts to be a strong resource for companies considering ESOPs.