ESOP Valuations and the Downturn

Closely held ESOP companies will face the probability of declining stock value even if their business is holding up. ESOP valuation specialists tell us that the multiples they use to value businesses will drop to reflect the declining multiples paid for companies in general. While each industry will face a different scenario, that could mean a reduction of 25% or more in the multiples. Helping employees understand why their stock value is going down even when the company is making money is a critical task for ESOP companies.