Expertise Beyond the Numbers

Greg Hogan, Principal at SC&H Capital, Discusses ESOP Trends

Employee stock ownership plans (ESOPs) are tax-qualified retirement plans that are allowed to purchase and own the stock of the plan-sponsor company.  Privately held business owners should take note of ESOPs as an exit strategy, as they often function as an alternative “buyer” of private company stock to provide liquidity to private company shareholders.

Since the economic downturn in 2008, ESOPs have risen in popularity as overall levels of M&A activity have lagged.  Many business owners that have not been successful in securing a 3rd party buyer via a traditional M&A process have used an ESOP transaction as an alternative succession plan.

In 2014, we expect that ESOPs will continue to be a popular option for business owners to consider due to recent increases in federal capital gain rates and the “Obamacare” surcharge tax that now applies to the sale of some private businesses.

These are some of the key insights from a recent podcast with Greg Hogan, Principal at SC&H Capital, who discusses these ESOP trends and much more.

To learn more about SC&H Capital’s Employee Stock Ownership Plan (ESOP) Services, click here.