Employee Stock OwnershipMarch 26, 2019What if...
Tax free companies, millionaire grocery clerks, real retirement savings. Crazy? No...it’s called an ESOP.
What if you could sell a percentage of your company to your employees for full fair market value and enjoy the fruits of your hard work now?
What if the employees paid nothing for their shares, but now had real retirement funds?
And what if your company became more productive and was exempt from federal and state tax on profits?
This is all possible through an ESOP, an “Employee Stock Ownership Plan.” In 1974, the federal government created a program that allows owners of businesses to sell some or all of their company to their employees.
The employees pay nothing. Rather, the business takes on a note (a "mortgage") that gets paid back over three to five years.
The owner gets paid full fair market value, and now the employees have a real stake in the company and real retirement savings. Not surprisingly, employee owned companies are much more productive than non-employee owned companies and turnover rates decrease dramatically.
And here's the best part...An ESOP company’s profits are tax free – forever. The tax savings pays off the mortgage!
And very few people know about this.
Pennsylvania has about 300 ESOPs including Sheetz, Dansko Shoes, and Your Building Centers, in nearby Altoona. Read what their CEOs have to say here.
At age 19 Cathy Burch took a job at WinCo, a supermarket chain and ESOP company. She worked in various roles - cashier, shelf stocker, inventory orderer, and by the time she was 42 she was a millionaire. And at WinCo, her story is not unique. Read more about the millionaire grocery clerks here.
To learn more, reach out to Rosalie Evans ( firstname.lastname@example.org ) at the nonprofit Pennsylvania Center for Employee Ownership, and visit us at ownershippennsylvania.org