Employee stock ownership plans (“ESOPs”) are a valuable tool for businesses to create a succession plan and provide retirement benefits to employees by having employees purchase employer stock. Although self-interested transactions are generally prohibited under the Employee Retirement Income Security Act of 1974 (“ERISA”), ESOPs are encouraged under ERISA despite the fact that the plans
David Whaley
David is a leader in the employee benefits industry. He holds leadership positions for the American Bar Association’s Employee Benefits Committee, the ESOP Association and the Ohio Employee Ownership Center. His practice focuses on assisting private and public companies and nonprofit organizations with all areas of employee benefits. This includes working with employers in design, implementation and compliance areas in connection with tax qualified plans, including 401(k) plans, ESOPs and defined benefit plans. His representation also extends to working with employers in arranging their nonqualified deferred compensation (e.g., 409A compliance), in addition to health and welfare arrangements and employee fringe benefits.
The Value of the ESOP Stock Valuation
The Department of Labor (DOL) has made it no secret that it actively engages in enforcement activities against employee stock ownership plans (ESOPs) with a particular focus on the valuation of the stock of privately held companies that is held or bought by the ESOP.[1] The valuation of the company stock is…