ESOP Sustainability

What is an ESOP Sustainability Study?

While repurchase obligation studies provide trustees with an understanding of potential
share repurchases, too often these studies fail to integrate an accurate value trajectory and do not provide
management with actionable data for planning purposes.

Prairie’s sustainability study focus points:

How to Create a Sustainable ESOP

ESOP policy decisions are generally established at the inception of the plan, when there is not a clear understanding of how such decisions will influence the business as it matures. Though an ESOP is simply a retirement benefit plan, policy decisions can have a significant impact on business operations.

Handling the complexities that may arise with mature ESOP companies requires extensive experience across multiple disciplines. Our proprietary ESOP Sustainability Study offers clients an integrated tool that will help them effectively manage the ESOP policy decisions that impact business operations.

How is an ESOP Sustainability Study Different From an ESOP Repurchase Obiligation Study?

To build a sustainable ESOP, the planning process must be more comprehensive than a basic forecast of the shares that will become eligible for repurchase.

Our ESOP Sustainability Study not only reviews repurchase obligation (“RO”), but also the interrelationship between repurchase obligation and valuation, the cash flow implications related to sponsorsing the ESOP and how they affect other corporate objectives. Given that each of these choices impact the others, it is critical to balance each of these elements collectively rather than treat them as independent decisions.

Long-Term Benefits of an ESOP

We help trustees, boards of directors and management teams understand the long-term impacts of ESOP policy decisions, providing a decision-making tool to promote organizational sustainability.

Let's Talk

Contact The ESOP Team

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David HorvathCPA

Managing Director 630.657.8157

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