PricewaterhouseCoopers Survey Shows 19% of Fast-Growing Companies Plan ESOPs as Business Transition Strategy

The 2006 Trendsetters Survey from PricewaterhouseCoopers asked 301 companies identified as very fast-growing about their plans for an exit strategy. Nineteen percent cited an ESOP. Companies could pick more than one choice, so the total percentages for each selected item sum to 146%. The top choice was sale to another company (62%), followed by sale to management (29%), family transition (22%), an ESOP (19%), and an IPO (14%). Half the companies identified themselves as high-tech. The data are very similar to a 2007 Inc. survey of fast-growing companies.

Given that ESOPs tend to be used for business transition more in mature companies than in fast-growing newer companies, the number of companies choosing ESOPs represents a potentially important change in how these plans will be used in the future.