Succession Stories E43: Debunking ESOP Myths | Kristy Britsch

When it comes to transitioning your closely held company, it’s great to have options. You’ve probably heard about strategic acquisitions - like Facebook buying Instagram - or financial buyers like private equity firms acquiring companies. Have you heard about ESOPs, employee stock ownership plans?

An ESOP allows employees the opportunity to buy stock in a closely held company to facilitate succession planning. Currently, there are around 7,000 ESOP plans in the U.S. with estimates that 28 million employees now control about 8% of corporate equity through an ESOP.

On Succession Stories, Laurie Barkman is joined by Kristy Britsch, senior counsel at Levenfeld Pearlstein. Kristy advises closely held businesses on ESOPs and helps navigate transactions and legal aspects that can arise during its life cycle.

Being part of an ESOP can provide numerous benefits to employees and the company. There are, however, several myths regarding ESOP ownership, preventing exploration of this compelling option.

Listen in to Laurie's conversation with Kristy to learn what an ESOP is (and isn't) and how your company shareholders might benefit.

Show Notes:

Listen in to learn more about:

  1. How companies incorporate ESOPs into business succession planning

  2. Examples where an ESOP may be a good solution for succession planning, and examples it may not be a fit

  3. Complexities related to an ESOP stock purchase transaction

  4. Issues that can arise during the life cycle of the ESOP post-transaction to avoid

  5. Best practices for CEO compensation in privately held companies

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About Succession Stories:

Welcome to Succession Stories insights for next-generation entrepreneurs. I'm Laurie Barkman. I've spent my career bringing an entrepreneurial approach to mature companies struggling with change. As an outside executive of a third-generation 120-year-old company, I was part of a long-term succession plan.

Now I work with entrepreneurs privately held companies and family businesses to develop innovations that create enterprise value in transition plans to achieve their long-term goals.

On this podcast, listen and while I talk with entrepreneurs who are driving innovation and culture change, I speak with owners who successfully transition their company and others who experienced disappointment along the way. Guests also include experts in multi-generational businesses and entrepreneurship.

If you are a next-generation entrepreneur, looking for inspiration to grow and thrive, or an owner who can't figure out the best way to transition their closely held company, this podcast is for you.

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