Does employee ownership lead to a loss of control?
No. Regardless of how much stock the ESOP acquires, you can still control all of the stock. This is because stock owned by the Plan is held in trust. Employees are beneficiaries of the economic value of the trust’s investments, but you can retain the voting rights and control. Properly designed, an Employee Stock Ownership Plan provides a way to tie a portion of each employee’s long-term compensation to the risk of the business. An ESOP combines the financial interests of the employees with those of the original shareholders so that teamwork and a long-range investment perspective towards the business are in everyone’s self-interest. We think employee ownership is the most efficient incentive program because its success is a direct function of the employee’s own efforts. In order to qualify for an ESOP, your company should be a profitable, taxpaying corporation with at least 15 full-time employees. If you meet these criteria, especially if you already maintain a profit sharing plan or
