Weighing the pluses and minuses of ESOPs
Abstract: Corporate finance, employee benefits and succession planning likely are key issues the owner of a manufacturing company must contend with. But there’s a multifaceted strategy that can handle all three issues. It’s the employee stock ownership plan (ESOP). An ESOP is a qualified retirement plan that’s similar to a profit-sharing plan, except it enables employees to own part of the company that employs them. This article explains leveraged vs. unleveraged ESOPs, and their potential benefits and drawbacks.