What is the balance sheet impact of the continuing (and escalating) obligation to repurchase employees stock?
There is little or no balance sheet impact due to the ESOP repurchase obligation (the corporation obligation to buy back stock from employees who are entitled to a distribution under the ESOP). However, it is strongly recommended that companies carefully consider the projected repurchase obligation of any intended ESOP transaction prior to implementing the ESOP, and then carefully monitor the repurchase obligations on a going forward basis. If a company does not properly plan for handling its repurchase obligations, growth may be constrained, or it may be forced to sell or go public to solve the problem.
