May 31, 2007
Termination Rate for ESOPs Seems to Be Slowing
In the past five years, ESOP terminations are running about one-third below their rate in the 1990s. While it is too early to tell if this represents a long-term trend, it also semes unlikely simply to be a statistical fluke. If the trend turns out to be more than an anomaly, it is likely a result of legislation allowing S corporations to have ESOPs, which makes it both more attractive and more practical to remain an ESOP over time.