Creating a Sustainable ESOP Distribution Policy

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Managing how and when employees get distributions from their ESOP accounts is a critical strategic issue for an ESOP company. Too often, companies simply follow the distribution an d diversification policies established when the ESOP was set up. That policy often calls for shares to be distributed only after termination and on the slowest schedule allowable. Similarly, employees often cannot begin to diversify their accounts until they have reached the statutorily required age and participation minimums. This is the right approach for some companies, but for others, it creates avoidable problems. ESOP companies should periodically review their distribution and diversification policies with their advisors. This book explains the issues and the options to consider. Show more