A Repurchase Obligation (RO) Analysis provides a forecast of ESOP distributions and participant benefit levels based on static financial and value assumptions. Other capital claims such as synthetic equity or debt instruments are not considered, nor are the impacts to future value of the RO itself.
A Sustainability Study is a holistic view of the company’s financial health and encompasses integrated financial, ESOP, and valuation analysis, examining repurchase obligation in the broader context of a company’s forecast cash flows. Considering all debt and equity capital claims, including synthetic equity and debt obligations, and their effect on future value, the sustainability study provides a platform to assess the effectiveness of the company’s ownership and compensation strategies and their influence on overall capital structure.
A Sustainability Study provides the critical framework for analyzing the impact of alternative operating performance and strategies on all stakeholders, and provides ESOP company leadership with actionable information related to:
- Affordability of capital claims
- Ability to operate the ESOP within the bounds of compliance limits
- Balancing equity allocation across stakeholder groups
- Ownership and compensation philosophies
- Capital allocation and growth strategies
- Achievement of broader corporate strategic objectives
- Modifications to ESOP or synthetic equity plan features
- Assessing and determining optimal ESOP funding strategies
- Evaluating the impact of various growth opportunities, including through M&A
Comparison
Chartwell Consulting Services
Ownership, compensation, and financial strategy are inseparable for privately held companies. Our consulting team has deep expertise across this spectrum, allowing us to provide complete and meaningful insight to help guide decision making to drive long-term results.
Employing a holistic approach, we collaborate with stakeholders, including senior management, boards, and ESOP trustees, to support them in making strategic decisions designed to sustain their organizations.