Mitt Romney and ESOPs
Executive Director
If elected, Mitt Romney would be the first U.S. president to have direct experience with ESOPs. Bain and Company, which Romney once headed, set up an ESOP in 1985, paying what in retrospect appeared to be an inflated price for 30% of the company. Romney joined Bain in 1973 and rose to be vice-president. In 1983, he left Bain & Company to head its new spin off investment firm, Bain Capital, where Romney focused on leveraged buyouts. In 1990, he rejoined Bain & Company to replace its founder, Bill Bain, after the business consulting firm had suffered a string of setbacks, dissension, and a scandal over its work with Guinness PLC. Bill Bain had tried to sell the company, but had no takers. Instead, it was recapitalized, with the ESOP now owning 40% of the stock. Romney successfully restructured the firm, which went on to become consistently successful. He left in 1992. The ESOP was terminated in 2000 for reasons we could not discover.