ESOPs – Employee Stock Ownership Plans

An ESOP, or employee stock ownership plan, provides a tax-advantaged solution that can meet a company’s needs in a variety of situations. ESOPs can be used to:

  • Generate shareholder liquidity
  • Create a market for the shares of a closely held company
  • Increase employees’ productivity by making them “owners”
  • Raise capital for strategic growth
  • Support a tax-advantageous exit strategy for a departing shareholder(s)
  • Rollup companies for growth with a tax-efficient strategy

ESOPs are complex creatures of the tax code and ERISA and require professionals with significant ESOP experience to help maximize potential benefits and minimize potential exposure, since individuals can be subject to personal fiduciary liability. To achieve the benefits of an ESOP, it is important to communicate properly with your employees, to maintain compliance with the complex ESOP rules and regulations, and to administer the ESOP in accordance with its terms.

With complex structures and numerous potential pitfalls, setting up an ESOP does not guarantee success. Griffin understands the pitfalls in establishing and maintaining a successful ESOP.

With financial, structuring and accounting professionals – along with employee benefits, tax and corporate lawyers from our affiliated law firm, Stevens & Lee – our multidisciplinary team is actively engaged in significant ESOP transactions on a regular basis. For over 25 years, we have guided numerous ESOPs through their complete life cycles – from an idea to implementation to ongoing advice and sometimes even to a business sale and final termination of the ESOP.

We have experience with feasibility, design and implementation of ESOPs for both Subchapter S and Subchapter C corporations. Among the areas where we provide service are:

As a large platform of multidisciplinary professional services providers, we can provide the resources to handle a wide range of issues that may arise in the ordinary course of business or in a transaction, unlike boutique law firms and other service providers that deal solely with ESOPs.

In addition, Griffin regularly handles corporate and merger and acquisition issues in a non-ESOP context, allowing us to call on their expertise when needed. Our investment bankers work together with Stevens & Lee professionals to access the capital markets, if needed, as well as our affiliate Pinnacle Risk Services, which provides insurance risk consulting services.

We are members of the National Center for Employee Ownership and the ESOP Association. We are also proud to be founding sponsors of the PaCEO as Founders Guild members.