The advantages of ESOPs are appealing, but it may not be feasible for every company. Selling to an existing ESOP company could make more sense for some businesses.
We have written in the past about the issue of how long is too long for an internal ESOP loan. In a typical ESOP, there is an external loan between the company and the lender(s) and an internal loan between the company and the ESOP. The internal loan is used to allocate the shares over time and is almost always longer than the external loan.
We recently awarded NCEO state superlatives to states demonstrating ESOP excellence this year—see our yearbook spread below, which provides some geographical ESOP fast facts compiled by our research team.
According to the latest data available from the Department of Labor, there were 6,669 ESOPs covering 14.4 million participants and holding close to $1.3 trillion in plan assets as of the end of 2015.
If you have ever been to an NCEO conference or meeting, you may have bumped into Ken Baker, CEO of 100% employee-owned NewAge Industries and a longtime advocate for employee ownership in the United States.