Russell Long, the Senator who made ESOPs possible, died on May 9. Long was the son of Huey Long, the former governor of and senator from Louisiana. He was elected to the Senate at 29 and rose to the chairmanship of the Senate Finance Committee.
Data on ESOP formation suggest that new ESOPs are being created at a slightly lower rate than existing ones are terminated. But that only tells part of the story. Based on a survey of ESOP attorneys, we estimate that between 300 and 400 companies are acquired by ESOP companies annually.
We surveyed ESOP companies starting on April 10 in order to gather data on how they are faring so far in the application process. As of this writing, we have received 164 responses from companies with ESOPs. Of these, 115 or 70% have already submitted a PPP loan application, and most of the rest are actively working with a lender.
As part of a survey the NCEO is conducting on ESOP repurchase obligation, 40% of the 256 respondents indicated that the ESOP owned 100% of the stock, while another 26% were more than 50% owned by the plan.
According to an NCEO survey of 204 closely held ESOP companies, 60% of the companies have their entire boards decide on executive pay, while 15% employ outside compensation consultants, and 12% rely on a committee of independent outside board members to make the decision.
