#162: What is an ESOP: A Deep Dive on How Employee Stock Ownership Plans Work

Today I’m talking about ESOPs (or Employee Stock Ownership Plans) with Dave Diehl, CFA. Dave is the CEO of Prairie Capital Advisors (one of the leading ESOP specialists in the country), based out of Chicago. Prairie Captial is unique because of their range of expertise, which covers both ESOPs as well as selling to a private equity firm. They really have the best interest of the client in mind. Dave talks about the basics of ESOPs in layman’s terms so everyone can understand the benefits of this type of exit process.

What you will learn:

• Dave’s background
• A brief history of ESOPs
• How is an ESOP an exit process?
• What does the process of an ESOP entail?
• How an ESOP gets valued
• What your roles and responsibilities are when working with a trustee
• How you get your money (percentage upfront vs. what percentage comes over time)
• All the tax benefits which come with the ESOP process
• How ESOPs impact the culture of your business
• What are the pros of an ESOP?
• What are the cons of an ESOP?

Takeaway:

Are you a viable candidate for an ESOP? There are a lot of pros that come with selling to your employees.

Links and Resources:

Prairie Capital Advisors

David Diehl, CFA 

ARKONA Boot Camp 

About Dave:

Dave Diehl is the Chief Executive Officer of Prairie Capital Advisors. Dave provides closely-held businesses with a complete understanding of the best available options for their ownership transition needs. He expertly executes projects for mergers and acquisitions (M&A), management buyouts (MBO), Employee Stock Ownership Plans (ESOPs), estate planning and other corporate finance purposes. Dave serves as a trusted advisor to a diverse range of clients nationwide delivering highly strategic consultation.

With extensive end-to-end management experience and a focus on his clients’ success, Dave helps ensure an exceptional ownership transition experience. Dave is a CFA Charterholder and is on the board of directors of two companies – a manufacturer of plastic parts and a financial consulting firm. He is also a frequent speaker in forums around the country on topics including ownership transition, valuation, capital management, and business sale. He is also a past chair of the Advisory Committee on Valuation with the ESOP Association.