Time to Sell Your Business? An ESOP May Be the Answer

Strategy Driven

Over seven years the company develops a solid client base, grows to 16 employees serving 40 clients, with revenues of $2 million annually. Selling one’s company to an ESOP, an employee stock ownership plan, does just that. Selling to an ESOP preserves company culture and increases productivity, which generally ensures strong future performance. How does an ESOP work? In an ESOP transaction, owners essentially sell stock, whether some or all, to employees.

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Why the U.S. Needs More Worker-Owned Companies

Harvard Business

And companion bills developed to enable the U.S. Some businesses with employee stock ownership plans (ESOPs) are converting into structures that more closely resemble worker co-ops. ” The company maintained the tax advantages of an ESOP, but distributed the shares in a way that would give employees with lower salaries greater voting power. ESOPs typically allocate shares to employees in proportion to their pay. Klaus Meinhardt/Getty Images.

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Huawei: A Case Study of When Profit Sharing Works

Harvard Business Review

At Huawei’s inception, Zhengfei designed the Employee Stock Ownership Plan (ESOP). At the time, Zhengfei had no idea what a stock option system was – not being familiar at that time with the types of incentives systems developed in the West. The structure of the ESOP is based on two important premises. Huawei’s ESOP can satisfy both human needs. The gaps between what CEOs earn and what workers do are startlingly large around the world.

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Treat Employees Like Business Owners

Harvard Business Review

And companies — except for the very smallest — can implement an employee stock ownership plan (ESOP), often funded through borrowing. Talent management Motivating people Developing employees ArticleEmployee loyalty and engagement are hot topics, and for good reason. Companies want to attract and retain talented people who really dig into their work. But most employers ignore two of the most powerful tools for making that happen.

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