Valuation advisors play a vital role throughout the lifecycle of an employee stock ownership plan (ESOP). During the formation process, valuation advisors work with a trustee team, including legal counsel, to develop an appraisal of the subject company, negotiate the terms of the transaction, and issue a fair opinion. Once established, valuation advisors complete an annual appraisal to set the share price for plan administration and redemptions in the normal course of business. At each of these various valuation phases, how are warrants addressed? What about SARs – both retention and performance? What happens when in the early years of an update after the transaction, the company’s performance suffers such that the debt is greater than the overall company value? Come learn about hot topics and key issues in the valuation of ESOP companies! NCEO Publication: The Fiduciary's Guide to ESOP Valuation NCEO Webinar: Valuation Checklist for ESOP Companies NCEO Document: Ready-to-use Evaluating an Appraisal Report sample checklist
Learning Objectives:
Upon completion, participants will be able to differentiate between a valuation for an ESOP formation transaction and a typical business valuation and identify what constitutes a well-rounded fairness opinion that protects both the trustee and valuation advisor.
Upon completion, participants will understand how warrants and SARs factor into transaction and update valuations.
Upon completion, participants will be able to understand other challenges faced in annual valuations when the company’s performance suffers from year to year.
