Financial Valuation of Employee Stock Ownership Plan Shares

  • ID: 2214373
  • Book
  • 272 Pages
  • John Wiley and Sons Ltd
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An indispensable road map to the financial valuation of ESOPs

A must–read for accountants and professionals with a business valuation accreditation or certification, pension actuaries, ERISA lawyers, Financial Valuation of Employee Stock Ownership Plan Shares identifies, explains, and explores:

  • The ins and outs of ESOPs, with a focus on what benefits a company/shareholder/plan participant would receive by transacting shares of stock with an ESOP
  • The formula for an Employee Stock Ownership Plan
  • Stock incentives and their attractiveness to employees
  • The nature and function of ERISA, Department of Labor, and IRS, including training material and the full text of Department of Labor proposed regulations
  • Details of important court cases, with differences in methodologies and interpretations evaluated by their respective pros and cons
  • Various examples and illustrations to be used as reference and research tools for the experienced and trained valuation professional
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About the Editor and Author.

About the Contributing Authors.

1. Introduction to ERISA and ERISA Plans.

2. Business Owner/Management Perspective.

3. Who Is a Good Candidate for an ESOP, and Why?

4. Trustee Duties in ESOPs.

5. Beneficial Interests, Rights of Participants, and Vesting.

6. Employee Benefit Perspective.

7. Leverage and the ESOP: A Lender s Perspective.

8. Independence, Objectivity, and Good Faith.

9. The Appraiser as a Financial Advisor.

10. Financial Analysis of the Sponsoring Corporation: Framing the Appraisal Assignment.

11. Accounting Standards and ESOPs with Debt.

12. Put Rights, Share Redemption Provisions, and Repurchase Obligations.

13. Adequate Consideration.

14. Control versus Minority Positions.

15. ESOPS and Taxes.

16. Shareholder Employment and Other Agreements: Phantom and Synthetic Equity.

17. Adjustments for Lack of Marketability.

18. Writing a Valuation Conclusion.

Appendix A: Department of Labor.

Appendix B: IRS Training Class Regarding Examination of ESOPs.



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LARRY R. COOK, CPA, ABV, CBA, is a financial advisor actively engaged in providing business valuation and succession planning, including wealth management, asset protection, and related services, to the private business owner. He has participated as a course instructor on a wide range of subjects in the valuations area and has participated as a speaker at national conferences on programs specific to business valuation. He currently serves as a committee member on the AICPA Business Valuation/Forensic Litigation Services Executive Committee, and on the North Harris–Montgomery County Community College advisory board. He is former president of the Financial Consulting Group and former chair of the Accredited in Business Valuation (ABV) Credential Committee for AICPA, as well as a member of the Board of Directors of the Texas Society of CPAs. He has provided expert testimony in a variety of areas and has engaged clients in the sale, merger, and acquisition of business and business interests. He is the author of the "ESOP Valuation" chapter in Financial Valuation: Applications and Models (Wiley).
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