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

nonprofit organizations like the Heartland Capital Strategy Institute are bringing together institutional investors, private asset managers, and worker representatives to harness some of the $13 trillion of assets in workers’ pension funds to invest in worker-friendly businesses that offer good investment returns. And companion bills developed to enable the U.S. The biggest difference is that workers have an important say in who manages them and how profits align with values.

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Treat Employees Like Business Owners

Harvard Business Review

Many large corporations manage to find big bundles of shares (and huge amounts of cash) for executive compensation, even though there’s little relationship between senior-management pay and financial results. And companies — except for the very smallest — can implement an employee stock ownership plan (ESOP), often funded through borrowing. It takes a careful mix of mission, management, and culture.

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