New Missouri Legislation Leads to a New ESOP Company
Executive Director
PFSbrands is a Missouri-based company with 120 employees that supplies hot food programs to convenience and grocery stores nationally. Shawn and Julie Burcham were the company's shareholders. On January 1, 2017, Missouri House Bill 2030 became effective, and PFSbrands became 100% ESOP-owned on January 3. In the words of Shawn Burcham:
We started our journey to an ESOP by contemplating the sale of stock with small percentages year over year. Then, it was announced that Missouri House Bill 2030 would become law. The bill incentivized business owners in Missouri to sell 30% or more of outstanding stock to employees in any given year under an ESOP. The incentive reduces the state capital gains tax in Missouri from 6% to 3%. While some states do not have capital gains taxes, Missouri did the right thing with this bill to stay competitive with some neighboring states that have similar incentives for ESOP transactions. This incentive directly impacted the financial outcomes of our modeling and was a major factor in making a 100% sale of stock mutually beneficial for both sellers and employees.