How would minority shareholders be affected by adopting an ESOP?
When a majority shareholder decides to sell stock to an ESOP, minority shareholders must be treated “fairly”. Under state corporate law (not ESOP rules and regulations) this may mean that minority shareholders need to be given the right to sell the same proportion of their stock to the ESOP that the majority shareholder is selling. If minority shareholders do not wish to sell stock at the present time or agree not to sell, they could be given a guarantee by the company that the stock would be redeemed at some future date.
