EMPLOYEE STOCK OWNERSHIP PLAN (ESOP)

The valuation of company stock is critical to an ESOP. T&M provides ESOP valuations (or ESOP appraisals) for a wide variety of companies. Many clients first need a valuation when they are considering an ESOP. However, once an ESOP is established, a valuation is required when company stock is contributed to the trust, and annually thereafter.

An ESOP, when properly structured, has the ability to provide business owners and businesses with significant tax savings . Furthermore, an ESOP can provide a company with enhanced cash flows and an employee benefit plan that is directly linked to the company’s performance. A well structured ESOP can help attract and retain employees.

T&M has a thriving ESOP practice. Our firm’s professionals include members of the ESOP Association of America, and the National Center for Employee Ownership. We can provide ERISA and ESOP Trustees with accurate and defensible valuation conclusions that meet all applicable ERISA, Internal Revenue Service and Department of Labor regulations. We have experience dealing with important valuation issues, including the ESOP Repurchase Obligation, Tax Savings, and Discounts.

 

Resources:

Have you considered the ESOP Repurchase Obligation? Read Considering the ESOP Repurchase Obligation and its Affect on Fair Market Value by Anne Meltzer.

Fairness Opinions

Fairness opinions are professional valuation opinions provided by investment banks and valuation firms regarding the fairness of a price offered in a capital transaction, such as the purchase of stock by an ESOP, a merger of two companies or an acquisition.  A fairness opinion by its nature is limited in its purpose.  Its purpose is to assure board members and shareholders that the contemplated transaction is “fair” from a financial point of view.  T&M has provided a number of fairness opinions in limited scope engagements in which it has participated as a valuation advisor.  A fairness opinion is not a substitute for business judgment and scrutiny; it can provide a thoroughly independent point of view and opinion.

For more information on our ESOP practice, please contact Brooke Tucker.