This article was originally published as a chapter in "Employee Stock Ownership Plans: ESOP Planning, Financing, Implementation, Law and Taxation" by The Beyster Institute at the Rady School of Management, University of California, San Diego, 2007.
An ESOP can be an effective tax-advantaged means of creating shareholder liquidity. At the same time, the ESOP provides an additional benefit for employees. But the ongoing payoff of the ESOP is based on its ability to align stakeholder interests. The ESOP has the potential to be the foundation for long-term growth in company value that will benefit all shareholders.
Succession planning and leadership development are two sides of an integrated whole that is essential for companies that seek to fully leverage employee ownership and achieve long-term sustainability.
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