Recently, Mary Josephs, the founder and CEO of Verit Advisors, a Chicago-based investment banking firm specializing in ESOPs, wrote a piece in Forbes about the ability of ESOPs to help spur growth and boost the ultimate sale price of your business if you’re looking to sell.
Josephs calls an ESOP “a too-seldom-used vehicle to help propel your company’s continued growth,” and specifically encourages mid-sized players in a consolidating industry, whom often face executives at larger competitors wanting to know if they’re ready to sell, to consider the great value of ESOPs.
A study published in 2013 supports Josephs’ position on ESOPs and their ability to lead to greater firm longevity. The study by economist Alex Brill found that despite economic fluctuations over the past decade, the S ESOP structure has not only shown to lead to greater firm longevity, but also higher wages, wage growth, job stability, retirement plan contributions, employment, and sales than would otherwise have been anticipated.
Take a look at why Josephs recommends considering an ESOP if you’re in a consolidating industry here.