Employee Stock Ownership Plan (ESOP)

We don’t just understand ESOPs. We’ve lived them.

Our team brings technical expertise, real-world experience, and a
people-first mindset to every stage of the ESOP journey. From evaluating whether an ESOP is right for your business to supporting an established ESOP, we deliver full-service guidance that evolves with your goals and helps protect your company and its employee-owners.

Every ESOP story starts in a different place.

For some business owners, an ESOP represents a potential path to succession, liquidity, and preserving the legacy they’ve built. For others, employee ownership is already part of their company’s story, bringing ongoing responsibilities related to valuation, compliance, governance, financial reporting, and supporting employee-owners.

Whether you’re evaluating an ESOP or managing an established one, our team can help you navigate what’s next.

Where are you in your ESOP journey?

Evaluating employee ownership.

Choosing an ESOP is about more than completing a transaction. It is about determining whether employee ownership supports your succession goals, provides the liquidity you need, and protects the future of the business you’ve built.

Our team helps business owners evaluate ESOP feasibility, understand potential benefits and challenges, and make informed decisions with confidence.

Challenges we help organizations considering an ESOP navigate:

Determining whether an ESOP is the right fit
Compare an ESOP to other succession and transition options while considering your personal goals, company objectives, leadership team, and long-term vision.
Understanding company value
Gain a clearer picture of your company’s value and the factors that influence it before entering a transaction.
Planning for ownership transition
Prepare for changes in ownership while maintaining operational stability and business continuity.
Evaluating tax implications
Understand the tax considerations associated with an ESOP transaction and how they may impact both shareholders and the company.
Structuring the transaction
Assess financing options, transaction structures, and the practical considerations involved in transitioning ownership to an ESOP.
Preparing employees for ownership
Help employees understand what employee ownership means and how it connects to the future success of the company.

Supporting long-term ESOP success.

Becoming employee-owned is only the beginning. ESOP companies face ongoing responsibilities related to valuation, compliance, governance, financial reporting, and supporting employee-owners.

Having operated as an employee-owned firm ourselves, we understand both the opportunities and responsibilities that come with sustaining a successful ESOP over time.

Challenges we help established ESOP organizations navigate:

Annual valuation requirements
Support annual valuation processes and help leaders understand the factors that affect share value over time.
Financial reporting and accounting complexities
Address accounting and reporting requirements unique to employee-owned companies while maintaining confidence in financial information.
Compliance and regulatory obligations
Stay current with evolving requirements and help support compliance across the ESOP structure.
Governance and fiduciary responsibilities
Support boards, trustees, and leadership teams as they fulfill their responsibilities and make informed decisions.
Employee communication and engagement
Help employee-owners better understand the business, how value is created, and the role they play in the company’s success.
Growth and strategic change
Evaluate how acquisitions, capital investments, leadership transitions, and other significant business decisions may affect the ESOP.

Our ESOP services include:

Core Services:

Specialty Services:

  • ESOP Plan Audit
  • Feasibility Study
  • Repurchase Obligation Study
  • Fairness Opinions
  • ESOP Accounting
  • Employee Communication & ESOP Education Consulting
  • Management Transition Planning

Outcomes we deliver:

  • Technical knowledge of ESOP structures, valuation, and compliance
  • Support with audit and tax filings
  • Guidance through transitions and succession planning
  • A collaborative partner who speaks the language of trustees, boards, and owners
  • A relational, values-based approach that supports both the business and its people
  • Clarity around complex ESOP accounting and financial reporting requirements

Why ESOP Companies Choose Redpath

Employee ownership comes with opportunities, responsibilities, and decisions that extend well beyond the initial transaction. Our team helps companies navigate those complexities with practical guidance backed by experience across valuation, audit, tax, compliance, and advisory services.

From feasibility studies and ownership transitions to annual valuations, plan audits, and long-term planning, we support companies through every stage of employee ownership. Our goal is simple: help organizations make informed decisions that support both the business and its employee-owners.

FAQs

ESOPs can provide meaningful tax advantages for both the company and selling shareholders, depending on how the transaction is structured. For example, qualifying C corporation shareholders may be able to defer capital gains through an IRC Section 1042 rollover, while an S corporation generally does not pay federal income tax on the portion of the company owned by the ESOP because the ESOP trust is a tax-exempt shareholder. These benefits can create additional cash flow for the business while supporting an ownership transition.

Start by determining whether an ESOP aligns with your goals as an owner and the financial realities of your business. An experienced ESOP advisor can help you evaluate your objectives, financial performance, ownership structure, leadership succession, and potential transaction structure before you invest significant time and resources in the process. For companies that appear to be a strong candidate, the next step is typically a more detailed feasibility analysis.

A company may be a strong ESOP candidate if these four important pieces are in place:

  1. You want to preserve the company’s legacy and culture.
  2. You care about rewarding the employees who helped build the business.
  3. The company has sufficient and sustainable cash flow.
  4. There is a capable leadership team to carry the business forward.

These are not the only considerations, but checking those four boxes can be a good reason to proceed with an ESOP feasibility study. A feasibility study takes a deeper look at whether an ESOP can work financially and structurally for the company and its owners. It typically evaluates factors such as company value, transaction structure, financing, cash flow, seller objectives, and the company’s ability to support the ESOP over time.

An ESOP can be an attractive succession strategy for owners who want to create liquidity while preserving the company’s independence, culture, and legacy and giving employees an opportunity to participate in future ownership. Depending on the structure, sellers may also have access to significant tax advantages, including potential capital gains deferral for qualifying sales under IRC Section 1042. For employees, an ESOP provides a qualified retirement benefit tied to company ownership without requiring employees to purchase the shares themselves.

Our ESOP Team

  • Brian Sweeney, CPA

    Partner

    ESOP Services Leader

    About Brian :

    Contact Brian :

  • Emmett Mulcahy, CPA, CVA

    Partner

    Valuation Services Leader

    About Emmett :

    I work with privately held businesses across a wide range of industries, with expertise spanning tax planning, business consulting, succession planning, and wealth management. I specialize in business valuations for gift and estate planning, ESOPs, fair value reporting, and other consulting purposes.

    Education: B.A., Accounting, University of St. Thomas; B.A., Finance, University of St. Thomas

    Professional Affiliations & Community: Member, AICPA; Member, MNCPA; Member, National Association of Certified Valuation Analysts; VP of Advocacy, MN/DAK Chapter of the ESOP Association; Member, Committee on Valuation, ESOP Association

    Fun Fact: In 2020 I was recognized as a Top 40 Under 40 Honoree by the National Association of Certified Valuators and Analysts (NACVA).

    Contact Emmett :

“Redpath walked us through our ESOP transaction, ensuring it was recorded correctly. They are great people, very knowledgeable, and easy to work with. I see the relationship as a true partnership.”

-VP Finance/CFO

Whether you’re exploring employee ownership, evaluating an ESOP as part of your succession plan, or managing an existing ESOP, our team is here to help you navigate every stage with confidence and clarity.

Ready to plan for what’s next?