Unlike most closely-held and family-owned businesses, in most ESOP owned companies the shareholders, the board of directors, and the management team are not all the same people. This increases the importance of understanding and working with the rules of corporate governance, both to avoid conflict and potential liability, and to maximize corporate growth and optimize corporate culture.
If I sell my business to an ESOP, will the trustee have the power to kick me out? If the board wants to replace the trustee, can the trustee replace the board first? When does the board have to discuss an issue with the trustee? When does the trustee have to ask the ESOP participants for direction on an issue? How does a board set compensation for executives when the board members are executives themselves? What if they are also trustees?
For over 25 years, the attorneys at SG&F have worked and lived with these rules, and with hundreds of ESOP owned companies who operate under these rules. We know the duties and the rights of each constituency. We understand the potential conflicts that may arise. We don’t just know how to comply with these rules; we understand how to work with them to enhance value, predictability, trust, fairness, stability and quality of corporate life. We know how to make them work for you.
Whether you are designing an initial or secondary ESOP transaction, addressing routine annual governance issues, or navigating through a major corporate change, the attorneys at SG&F know the rules and understand the issues that you are facing. We have the experience to guide you through those issues to a successful outcome.
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