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How an Employee Stock Ownership Plan (ESOPs) works Thumbnail

How an Employee Stock Ownership Plan (ESOPs) works

Download the episode on Spotify here / Apple here / YouTube here

Josh & Jay welcome Will Steih, Managing Director of Prime Capital Investment Advisor’s Tennessee office, to the studio for the 5th and final chapter of our Business Owner Strategies & Solutions (B.O.S.S.) Series, a discussion about Employee Stock Ownership Plans (ESOPs). We discuss why a business owner would consider offering ownership in their company to its employees, including the typical criteria needed for a successful ESOP.

Key Takeaways:

  • One of the potential benefits of an ESOP is increased productivity of the employee-owners and profitability of the business.  
  • The primary business owner can potentially sell company stock in a tax-free manner to the employees and there are potential tax savings related to lack of income taxes paid at the corporate level with an ESOP.
  • An ESOP provides employees the ability to take an ownership mentality to the next level and participate in company’s growth over a long period of time. It also allows an owner to that would like to avoid selling to a competitor the ability to execute an succession plan.  
  • As companies like Publix & UPS have demonstrated, an ESOP represents the full cycle of the American Dream, giving employees the opportunity to have an ownership stake in the business that writes the paycheck.

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