The employee stock ownership plan (“ESOP”) distribution policy—the policy which dictates the timing, method, and form in which participants receive their ESOP account balance upon termination—is a key element of plan design. Accordingly, company leaders should thoughtfully approach the development of their policy as well as changes to the policy that may be necessary after the plan’s inception. What works well early in the life of the ESOP may not work as well years later. With careful consideration and attention, distribution policy is a tool ESOP companies can use to manage repurchase obligations (“RO”) and participant benefit levels throughout the ESOP lifecycle.
“I really enjoy working with and educating companies of all stages on the ins-and-outs of managing their ESOPs. To know we have helped a company understand all the available options and have recommended a solution that will best help them meet their unique objectives is truly rewarding.”