Employee stock ownership plans ("ESOPs") are a special breed of qualified retirement plans. Whereas a traditional profit sharing or 401(k) plan is typically invested in mutual funds, an ESOP is designed to invest primarily in stock of the sponsoring employer. This means that an ESOP can deliver powerful incentives to employees who are motivated to work to better their own retirement funds. In recognition of these benefits, policy makers and academics have long touted ESOPs and other forms of employee ownership. Colorado is the latest in that trend.
Read MoreWASHINGTON, April 12, 2019 /PRNewswire/ -- The ESOP Association applauds Representatives Ron Kind (D-WI-3) and Jason Smith (R-MO-8), who earlier this week introduced pro-Employee Stock Ownership Plan (ESOP) bill H.R. 2258. The measure, which seeks to encourage the formation of ESOPs, is the House companion to S. 177, which was introduced in the Senate earlier this year by Sen. Pat Roberts (R-KS).
Read MoreA new bill was introduced in California on February 22, 2019, by Senator Scott Wilk (R). The bill, SB-553, would provide an incentive for some California businesses to adopt employee stock ownership plans, better known as ESOPs. Two major problems facing the United States today are the vast number of Americans with little to no retirement savings and the many owners of small- to medium-sized businesses with no succession plan in place for when they retire. The widespread adoption of an ESOP program may be a solution to both of these problems. Other states in the United States have recognized the potential benefits of ESOP adoption and have already put in place ESOP-friendly legislation. These states include Iowa, Missouri, and Colorado.
Read MoreLike every state in the U.S., Massachusetts is worried about what will happen when the baby boomer owners of thousands of small to midsize businesses reach retirement age, in what is being called the "silver tsunami." Fewer and fewer small business owner now expect to pass their enterprise onto their children and many older entrepreneurs, concerned about the possibility of having to shutter their businesses and lose their years of investment, have turned to selling to large conglomerates or private equity firms, which often lay off workers or gut the businesses.
Read MoreThe IRS has published an Issue Snapshot discussing methods for preventing an Internal Revenue Code (IRC) Section 409(p) violation for S corporation employee stock ownership plans (ESOPs).
Read MoreWe're both planning to attend the annual conference of the National Center for Employee Ownership in Pittsburgh next week. The prospect got us thinking about employee stock ownership plans, or ESOPs, which are even now one of the most misunderstood and underutilized devices in an entrepreneur's toolkit.
Read MoreThe owners of Bowers + Kubota Consulting, Inc. sought to dispose of their interest in their company by forming an ESOP. They appointed attorney, Saakvitne as trustee of the ESOP and obtained a valuation of the company before negotiating the sale of their shares to the ESOP. The Department of Labor sued the owners, company, and trustee for breaches of fiduciary duty and prohibited transactions in Hawaii federal district court. The DOL alleged that the appraisal of company shares used to fund the ESOP was flawed, resulting in an inflated value for the company's stock because the appraiser used unreasonable revenue projections and improperly applied a 30% control premium when no change in control of the company occurred.
Read MoreTwo, long-standing family-run enterprises unite for greater opportunities and to offer customers more end-to-end supply chain solutions.
Read MoreFood City Holdings Inc., doing business as Food City and Save-A-Lot food stores, has completed a transaction to become 100% employee-owned through its employee stock ownership plan.
Read MoreEntertainment Partners, a major payroll and software company, on Tuesday announced that it has agreed to be acquired by TPG Capital, a private equity firm that is also a majority owner of talent agency CAA. EP's current management team will continue in their roles, the company said in a statement.
Read MoreSenators introduced a bipartisan bill that would encourage employee stock ownership as a means of retirement savings for workers. U.S. Senators Pat Roberts (R-Kan.) and Ben Cardin (D-Md.) introduced Senate Bill 177 which would, in part, expand the creation of S Corporation ESOPs. Introduced on January 18, 2019, the new bill has the support of 24 Democrat and Republican sponsors.
Read MoreBefore there was a craft brewery on every corner, there was Mass Bay Brewing Company. Founded on Boston's waterfront by Dan Kenary, Richard Doyle and George Ligeti, Mass Bay was in the vanguard of the current craft beer movement. A postgraduation trip to Europe in 1982 had introduced college friends Kenary and Doyle to the range of beer available outside the American market. Artisanal coffee and ice cream were surging in popularity back home, and the two thought they could do something similar with beer. After brief detours—Kenary tried his hand at banking in Chicago, and Doyle went to business school, where he met Ligeti—they reunited in Boston in 1986 to open Mass Bay.
Read MoreWASHINGTON (Reuters) - The Parsons Corporation, a construction and engineering company known for building airports and subways, has filed paperwork for an initial public offering that would value the company at around $3 billion, three people familiar with the plan said.
Read MoreThe namesake founder and owner will be retired, but the Richard L. Bowen + Associates architecture and engineering firm will keep the name as employees conclude their purchase through an employee stock ownership plan.
Read MoreChuck & Don's, a pet-food retail chain with stores in four states, has been sold to a private equity-backed firm. New York City-based Independent Pet Partners (IPP) said it will create a co-headquarters location in the Twin Cities with members of the current Chuck & Don's team to help grow the other pet-store brands in its portfolio.
Read MoreLorain, Ohio-based Absolute Machine Tools announces that the company has been sold and is now owned by an Employee Stock Ownership Trust (ESOP), effective immediately. In the transaction, owners Steve and Courtney Ortner sold 100 percent of their ownership interest to a newly created ESOP, allowing current and future employees to gain a beneficial ownership interest in the company without any personal monetary investment.
Read MoreLed by industry veteran Andy MacGregor, 100% employee-owned general contracting firm to operate out of the West Loop
Read MoreEmployee ownership can boost workplace benefits and collaboration
Read MoreLiberalism is ascendant, at least in the Democratic Party. New Gallup polling just out shows that for the first time, more than half of Democrats identify as "liberal" as opposed to "moderate" or "conservative." The left's newly minted hero Alexandria Ocasio-Cortez is becoming the right's new favorite foil. Her Green New Deal and amplification of Bernie Sanders' cry for Medicare for All are gaining a great deal of attention for their boldness as much as for their potential to bust the federal budget. Obama aide Jon Favreau argues that people "want ideas that are commensurate with the size of the challenges we're facing" rather than the incrementalism of compromise.
Read MoreThe ESOP Association (TEA) announced that James J. Bonham will assume the role of President and Chief Executive Officer (CEO) on March 1. Founded in 1978, TEA is America's largest national trade association focused on advancing employee ownership through the Employee Stock Ownership Plan (ESOP) model.
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