Business View Magazine - July 2023

46 BUSINESS VIEW MAGAZINE VOLUME 10, ISSUE 7 the final decision. These include whether it makes sense financially, evaluating whether the company has a payroll of sufficient size to support the costs associated with an ESOP, and assessing the potential tax benefits for the seller, the company, and the participants. He adds that beyond the financial aspects, there are also non-financial questions such as whether the priority is obtaining the highest possible return for their ownership in the company. While an ESOP may still be the best option in this regard, it’s worth noting that selling to an outsider could potentially provide faster access to funds. However, he notes, “People should also ask themselves how important the legacy of their businesses is, having the name remain the same, having the same set of core values, preserving the jobs of the leadership team and everybody on staff. Some of those jobs, no matter what a buyer says, are probably going to go away if an outsider buys the business.” As for the benefits of an ESOP, Rodgers suggests that it should be viewed as a wealth- building plan and not solely a retirement plan. “Wealth building is relevant, no matter what your age is,” he says. “The second thing is that with ESOP companies, you don’t take a hit to your current day compensation. In fact, ESOP companies tend to actually pay a bit more, as they’re more likely to outperform so that often translates into bonuses.” He explains that ESOP companies also tend to invest more in their employees. “That’s partly because companies that become employee- owned are more likely to believe in an employee-centric way to approach management. Also, if you’re an ESOP participant, the company simply has more invested in you already. If you leave, then you’ll need to be paid out.” Because employee-owned companies prioritize their workforce and invest in their development they are more inclined to offer additional benefits and support such as tuition reimbursement programs and well-