How Well Do ESOP Acquisitions of Non-ESOP Companies Work?

According to the National Center for Employee Ownership, in recent years ESOP companies have been acquiring other companies at a rapid rate. There are probably as many or more companies acquired by ESOP companies as there are new ESOPs in any year.

Impact on ESOP Participants of S Corporation Status

Time certainly does fly - it seems hard to believe that we have had S corporation ESOPs for over a decade now. Still, I continue to get questions that relate to the impact of the S corporation provisions of the Internal Revenue Code ("Code") on ESOP participants.

Implications of the LaRue Decision for ESOPs

Since a seminal case in 1985 (Massachusetts Mutual Life Insurance Company v. Russell, 473 U.S. 134), courts have largely, if not unanimously, concluded that individuals cannot sue ERISA plan fiduciaries for individual losses to the plan.

Is It Too Risky Not to Be in an ESOP?

Reporters and skeptics often ask us "isn't it too risky to be in an ESOP?" After all, they say, you could lose your job and your retirement. It's an understandable concern, but the real question should be "Is It Too Risky Not to Be in an ESOP?"

Proud of Your Employee Ownership Plan? Let Other People Know

People often ask me why, if employee ownership is such a good idea, more people don't do it. There are a lot of reasons, but the main one is that most business owners don't know much (or anything) about it, and what they do know is often wrong.

Redeeming vs. Recirculating ESOP Shares

One of the most interesting issues in employee stock ownership plan (ESOP) repurchase obligation planning and funding is whether shares should be recirculated in the ESOP or redeemed by the corporation.

Safe Harbor 401(k) Contributions Made to an ESOP

The concept of the safe harbor 401(k) plan design is to avoid the need to perform the special nondiscrimination testing applicable to 401(k) plans. Such tests are known as the average deferral percentage (ADP) test and the average contribution percentage (ACP) test.